Predicted Lifetime Value (pLTV)
Predicted Lifetime Value (pLTV) is the anticipated or potential worth of a customer, derived from a combination of historical insights and current metrics. It empowers marketers to craft and refine campaigns based on projections of their audience's anticipated consumer behaviors.
Traditionally, Lifetime Value (LTV) represents an estimation of the average revenue a customer is expected to generate throughout their engagement with an app or service. However, with evolving data privacy regulations, measuring LTV becomes challenging due to restricted access to detailed and long-term performance data.
To address this challenge, pLTV utilizes behavioral characteristic clusters to segment the audience. Rather than relying on individual identities, segmentation is based on early-stage interactions with the user funnel. This approach offers insights into the future potential of users to contribute significant value to the business.
The importance of pLTV lies in its ability to provide marketers with predictive analytics that guide campaign strategies. By understanding the potential value of customers based on their behavioral patterns, marketers can tailor campaigns to effectively engage and retain high-value users, even in the face of data privacy constraints.