Earlier quoted context omitted.
I'm afraid of being downvoted, but the algorithm for an Amazon return looks something like: Your LTV = Forecasting total revenue from your transactions so far Revenue = The sum of your past transactions Refund? = LTV - Revenue - Refund Cost > 0 This is a much simpler, much more logical model. It appears everywhere, like with credit card disputes or when you get service discounts to not leave. Because when you don't g…
Thanks for this, very informative. So LTV is forecasted "lifetime value". So, if I'm 30, they'll estimate ~50 years of revenue going forward from me and use this as LTV?
No. If you're 30, they might (or might not) group you with other 30 year olds, if that's important, and run this model against you all as a group. But you don't punch in "he has 50 years left to live" in the model. The model doesn't know any of that, it just knows your transaction history, and it works better when the population of histories are more similar than dissimilar. Though it's also very effective when run against a large population too.