Predicted LTV Too High

Hi Cameron,

Thanks for creating this great library!

I’m having a few problems with the values predicted using customer_lifetime_value( ).

I would expect the LTV to be a slightly discounted version of the predicted purchases * average order value, but as shown in the screen shot below it’s actually coming out much higher:

In one example, a customer who has only spent $180 over 2 years is predicted to have a 12 month value of $2670.

Is there an error somewhere in the calulate being caused by the fix for Issue #180?

Cheers,

Duncan

[orenshk]

what’s the correlation between frequency and monetary value in your dataset?

[ColtAllen]

I’ve a good idea of what’s causing this, which I’ve summed up here and will be working on in the btyd successor library.