Book Image

The Art of Data-Driven Business

By : Alan Bernardo Palacio
Book Image

The Art of Data-Driven Business

By: Alan Bernardo Palacio

Overview of this book

One of the most valuable contributions of data science is toward helping businesses make the right decisions. Understanding this complicated confluence of two disparate worlds, as well as a fiercely competitive market, calls for all the guidance you can get. The Art of Data-Driven Business is your invaluable guide to gaining a business-driven perspective, as well as leveraging the power of machine learning (ML) to guide decision-making in your business. This book provides a common ground of discussion for several profiles within a company. You’ll begin by looking at how to use Python and its many libraries for machine learning. Experienced data scientists may want to skip this short introduction, but you’ll soon get to the meat of the book and explore the many and varied ways ML with Python can be applied to the domain of business decisions through real-world business problems that you can tackle by yourself. As you advance, you’ll gain practical insights into the value that ML can provide to your business, as well as the technical ability to apply a wide variety of tried-and-tested ML methods. By the end of this Python book, you’ll have learned the value of basing your business decisions on data-driven methodologies and have developed the Python skills needed to apply what you’ve learned in the real world.
Table of Contents (17 chapters)
1
Part 1: Data Analytics and Forecasting with Python
4
Part 2: Market and Customer Insights
9
Part 3: Operation and Pricing Optimization

Calculating CLV

Customer lifetime value (CLV) is a metric used to describe how much money a company can expect to make overall from a typical customer during the duration that person or account stays a customer. CLV is the total amount a company makes from a typical customer during the term of that customer’s relationship with the company and it is used in marketing to forecast the net profit that will be generated over the course of a customer’s entire future relationship.

Knowing the CLV of our clients is crucial since it informs our choices regarding how much money to spend on attracting new clients and keeping existing ones. The simplest way to calculate CLV is by multiplying the average value of a purchase by the number of times the customer will make a purchase each year by the average length of the customer relationship (in years or months).

Numerous benefits can be derived from calculating the CLV of various clients, but business decision-making is the key...