How are Customer Lifetime Value, Churn Risk, Credit Risk calculated
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Lifetime Value, Churn Risk and Credit Risk seem to be calculated automatically after customer's basic information is entered. Definitely some logic is working back ground to come out with the result.
I wonder how are these three data defined by system default, and where can I find declare expressions and formulas of them (Somewhere in Designer Studio?) Also, am I able to edit the formula (say, add or delete certain factors) for customization needs?
Also, this is a deep POC on CLV.
https://community.pega.com/system/files/pdfs/pmfs-74-customer-lifetime-value.pdf
Thanks so much for your kind reply.
I got a brief understanding of the significance, as well as the engine process of the 3 concepts.
However, so far these are all only declarations and expressions from articles, and I would like to further verify the idea by comparing them with actual data and configurations on Pega applications. According to the above articles, cost of capital, cost of acquisition, regular/ one-time margin are the main factors to derive the NPV of CLV. I suppose that the CLV calculation mechanism is working even before users make any modifications, so does it mean that neither customer revenue, nor past sales data are not taken into consideration by default?
Could you please tell me where can I find the data table, with all the values of variables stored?
Customer Lifetime Value (CLV) does have declare expressions and formulas ... and is laid out in this article.
https://community.pega.com/knowledgebase/articles/pega-foundation-communications/customer-lifetime-value-clv-data-model-and-calculation
Churn Risk and Credit Risk are driven by scorecards or models. This link is general.
https://community.pega.com/sites/default/files/help_v83/procomhelpmain.htm#/pxadminstudio/dsm/da-portal/concepts/da-predictive-models-con.htm
This one is more specific and details the engine process.
https://community.pega.com/knowledgebase/articles/pega-client-lifecycle-management-financial-services/customer-risk-assessment