Customer Lifetime Value Prediction: An In-Depth Exploration with Regression, Regularization and Hyperparameter Tuning
- Title
- Customer Lifetime Value Prediction: An In-Depth Exploration with Regression, Regularization and Hyperparameter Tuning
- Creator
- Adhegaonkar V.R.; Thakur A.R.; Varghese N.; Cheriyan A.
- Description
- In today's dynamic business environment, companies have been strategically shifting towards a customer-centric approach from their traditional product-centric focus. The main goal of this paper is to estimate customer lifetime value of 5,000 customers in the retail industry. This research follows a step-by-step approach to construct a multiple regression machine learning model. The model used in the study is based on the nine features to predict the customer life time value. First basic train-test split model is developed, which predicted 74% of variation in the customer lifetime value. This necessitates to improve the model performance, hence to address the multicollinearity problem lasso regularization is used. After lasso regularization , final model is trained with hyperparameter turning for further model performance improvement. The results show significant improvements in predicting customer lifetime value with the final model. This study suggests that the machine learning regression models can help to businesses to better understand how much value they can generate from individual customer.This deep understanding about customers helps retail businesses to align their customer engagement strategies to create a positive impact on the profitability and maximizing overall value offered to the customers. 2024 IEEE.
- Source
- TQCEBT 2024 - 2nd IEEE International Conference on Trends in Quantum Computing and Emerging Business Technologies 2024
- Date
- 2024-01-01
- Publisher
- Institute of Electrical and Electronics Engineers Inc.
- Subject
- Customer life time value prediction; Hyperparameter turning; Learning curve; Regularization
- Coverage
- Adhegaonkar V.R., Christ University, Dept of Business Management, Bengaluru, India; Thakur A.R., Sri Balaji University, Dept of Business Management, Pune, India; Varghese N., Christ University, Dept of Business Management, Bengaluru, India; Cheriyan A., Christ University, Dept of Business Management, Bengaluru, India
- Rights
- Restricted Access
- Relation
- ISBN: 979-835038427-7
- Format
- Online
- Language
- English
- Type
- Conference paper
Collection
Citation
Adhegaonkar V.R.; Thakur A.R.; Varghese N.; Cheriyan A., “Customer Lifetime Value Prediction: An In-Depth Exploration with Regression, Regularization and Hyperparameter Tuning,” CHRIST (Deemed To Be University) Institutional Repository, accessed February 25, 2025, https://archives.christuniversity.in/items/show/19166.