Customer and Corporate Valuation with Appraise

Appraise audits customer risk and opportunity by using proprietary statistical models on transactional data

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Finally. An accurate picture of your customer’s value.

Customer lifetime value is a key determinant of investment risk and opportunity. Traditional excel-based approaches (such as cohort analysis) try to capture and predict customer lifetime value, but tend to ignore what makes customers unique (heterogeneity). This can make these traditional models inaccurate and lead to ineffective decision-making. Appraise leverages probabilistic models that account for customer heterogeneity to produce highly predictive forecasts, providing clarity on both LTV distribution and Company growth prospects.

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Leverage probabilistic models that account for customer heterogeneity

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Identify drivers of high-value customers

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Make better informed operational and investment decisions

Example outputs

Learn why our approach is better than traditional cohort analyses, what types of models we use, and what the Appraise process looks like by

CLV

Appraise models projected cohort performance from individual-level CLV

  • Typical analyst models forecast cohort performance based on the trajectory of past cohorts, but CLV can change substantially from cohort to cohort
  • A common pattern is for CLV to decrease substantially as companies grow: as companies expand their targeting criteria, they start to acquire more marginal customers
  • This can make extrapolations from previous cohorts (who are often used out of convenience since they have the most data) overly-optimistic

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Tying CLV to marketing investment performance

  • In the Appraise framework, the total return on marketing investment is simply CLV / CPA. Since CPA is (mostly) observed, having a CLV metric makes evaluating marketing ROI straightforward

 

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Contribution margin projections based on customer acquisition assumptions

  • Using projected spend levels, we can forecast customer acquisition, and then forecast customer-level behavior to build a customer-based forecast of both revenue and contribution margin
  • Appraise can stress test core growth assumptions using scenario analysis, helping build conviction in business evaluation decisions

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