Integrate returns into CLV predictions

 

Problem: When scoring your customers’ lifetime value, orders are only one side of the coin. Maybe a customer with a high order value also did many return deliveries.

Solution: Import the number of returns (or the returned value) as a URM category on a regular basis and compare it with number of orders and order value.

 

Compare orders and returns to find your truly valuable customers, and also use this information to cluster your customers for marketing.