Predicting User-Level Lifetime Value

Codeway wanted to attract new subscribers who were likely to become long-term customers for its mobile software-as-service offering. To predict the long-term value of new customers, Codeway worked with Churney, a solutions provider that specialises in detailed predicted lifetime value models.

Using Churney’s model, Codeway created a custom ad optimisation event to indicate the acquisition of a highly profitable customer based on a predicted lifetime value model. In this way, it could increase the number of highly valuable users from its Facebook and Instagram ads. This new strategy was tested against Codeway’s previous customer acquisition campaigns (which used standard ad optimisation) using a conversion lift test. The two campaigns both used video ads, which reached out to broad audiences in the US.

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The results

Custom-made customers

Codeway’s custom event optimization campaign help it attract customers for the long term.

Between August 22–September 14, 2022, the campaign achieved:

• 32% more incremental subscriptions, compared to usual strategy
• 19% decrease in cost per incremental high-value customer acquisition, compared to usual strategy
• 20% higher predicted lifetime value of newly acquired customers, compared to usual strategy