Calculating Customer Lifetime Value and Churn using Beta Geometric Negative Binomial and Gamma-Gamma Distribution in a NFT based setting

TL;DR

This paper applies Beta Geometric Negative Binomial and Gamma-Gamma models to calculate Customer Lifetime Value and churn in NFT transaction data, enabling data-driven marketing strategies in blockchain settings.

Contribution

It introduces the application of BGNBD and Gamma-Gamma models specifically to NFT transaction data for CLV and churn estimation.

Findings

Effective modeling of NFT customer data for CLV estimation.

Insights into customer retention and value in blockchain-based markets.

Potential for improved marketing strategies based on model outputs.

Abstract

Customer Lifetime Value (CLV) is an important metric that measures the total value a customer will bring to a business over their lifetime. The Beta Geometric Negative Binomial Distribution (BGNBD) and Gamma Gamma Distribution are two models that can be used to calculate CLV, taking into account both the frequency and value of customer transactions. This article explains the BGNBD and Gamma Gamma Distribution models, and how they can be used to calculate CLV for NFT (Non-Fungible Token) transaction data in a blockchain setting. By estimating the parameters of these models using historical transaction data, businesses can gain insights into the lifetime value of their customers and make data-driven decisions about marketing and customer retention strategies.