Attribution Modelling and Predicted CLV: The Power Couple Your Marketing Strategy Needs

Some things are just perfect together: Netflix and chocolate, football and beer. And when it comes to digital performance, there’s one dynamic duo that takes the cake: Attribution Modelling and Predicted Customer Lifetime Value (pCLV).

These two aren’t just great on their own—they’re a total power couple. When you combine them, you unlock the secret to marketing that’s not just effective but profitable - it’s about understanding the long-term value of what works. Let us explain why these two are key components of you performance roadmap.

Attribution Modelling: Figuring Out What’s Working

Attribution modelling is all about understanding what drives conversions. It examines the customer journey across multiple touchpoints and assigns credit to the channels, campaigns, or content that influence purchase decisions.

For example, a last-click attribution model gives full credit to the last interaction before a purchase, while a multi-touch model distributes credit across multiple touchpoints. Regardless of the method, attribution helps answer the critical question: “Which marketing efforts are delivering results?”

Here’s the thing, though: Attribution is great at handing out trophies to your marketing channels, but it doesn’t ask the follow-up question: “Are these good customers good or just one-hit wonders?”

Predicted CLV: Looking Beyond the First Date

This is where Predicted CLV swoops in like the hero your marketing team didn’t know it needed. Instead of obsessing over the short-term revenue from a conversion, pCLV looks into the future (cue the dramatic music) to estimate how much a customer will spend over their lifetime.

It’s like the friend who tells you, “Sure, they’re fun now, but are they really relationship material?”

So, instead of celebrating that $50 purchase from a new customer, pCLV helps you figure out if that person is likely to spend $500 (or ghost you after one order). It shifts the focus from “Yay, conversions!” to “Yay, profitable customers!”

Why These Two Are a Perfect Match

Now here’s where the magic happens. When Attribution Modelling and pCLV join forces, they give you the full picture - not just what’s driving conversions, but which conversions are actually worth it.

Together, they let you:

1. Focus on the channels that bring in high-value customers
Your attribution model might show that Instagram ads are driving tons of sales, but when you layer in pCLV data, you might discover that those customers barely stick around long enough to finish their first order. Meanwhile, email marketing might bring in fewer customers - but they’re the VIPs who come back for more (and bring their friends).

2. Stop wasting money on low-value channels
Let’s face it: Not every campaign deserves your hard-earned budget. By combining these two tools, you can shift your spending to the channels that bring in not just more customers, but better ones. Think of it as Marie Kondo-ing your marketing strategy - keep what sparks profit, ditch what doesn’t.

3. Create better, more personalised experiences
Want to impress your best customers? Of course you do! Knowing which channels attract high-CLV customers lets you double down on creating personalized experiences for the people who really matter.

A Real-Life Example

Imagine you’re running a business where you can recognise users across their purchases. So, any subscription, BtB, e-com, finance company. Picture you’re running a e-com business for gourmet snacks. (Because who doesn’t want fancy chocolate delivered to their door?)

Your attribution model shows that TikTok ads are killing it - tons of sign-ups every week. Yay! But when you bring in pCLV, you notice something strange:

• TikTok customers only stick around for one month before cancelling.

• Meanwhile, display + email subscribers stay for a year and spend 5x as much.

Suddenly, the TikTok ad frenzy doesn’t look so great. Sure, it’s bringing in lots of people, but they’re like guests who show up to your party, eat all the chips, and leave before the music starts. Meanwhile, your display sign-ups are the ones helping you clean up after the party.

With this insight, you’d probably redirect some of that TikTok budget into growing your display activities. Boom - strategy upgraded and promotion to commercial director coming up.

Getting Started with the Dynamic Duo

Ready to play matchmaker for Attribution Modelling and pCLV?
Here’s how to get started:

1. Set-up Your Attribution Model:
Identify which KPI’s should be modelled, and which offline dynamics should be included in the model.

2. Build a Predictive CLV Model:
Use your historical customer data to estimate customer lifetime value for each acquisition. Don’t worry - you can hash customer ID’s so there’s no need for GDPR agreements with Predictify.

3. Overlay the Data:
Look at your attribution results through the lens of CLV to see which channels bring in the most valuable customers.

4. Profit:
Look into which channels and messages bring in the most valuable and the highest effectiveness

The Bottom Line of Attribution Modelling and Predicted CLV

Attribution Modelling and Predicted CLV are a fantastic combination for a lot of business and business models. Together, they help you stop chasing vanity metrics and start focusing on what really matters: finding and keeping the customers who’ll stick with you for the long haul.

Because at the end of the day, marketing isn’t just about making the sale - it’s about building relationships that last.

So, have you tried pairing Attribution and CLV in your strategy?
Send us a message if you’re ready to take your analytics game to the next level.