The Ultimate Guide to Increasing Your Banking App CLV by 3x

There are over 350 banking apps in the world currently, and the number is growing.

In the dynamic world of fintech, banking apps have revolutionized the way people manage their finances. These digital-first banks, which provide seamless, customer-centric banking experiences, pose a challenge to traditional banks. In today's fiercely competitive market, the key to long-term success lies in retaining customers and maximizing their value. Here, Customer Lifetime Value (CLV) has a crucial role to play.

• CLV is the ultimate metric for banking apps that quantifies customer long-term value. With the right strategies and insights, it's entirely possible to triple your banking app's CLV.

Throughout this blog post, we will unveil the mysteries of CLV and look at proven strategies for boosting it threefold. We'll dive into how to nurture long-term relationships with customers and drive revenue growth via customized user experiences and data-driven marketing.

• For deep understanding we recommend you to check: AI-BASED CUSTOMER JOURNEY PREDICTIVE ANALYTICS FOR THE FINANCE AND FINTECH INDUSTRIES

Predicting Customer Lifetime Value (CLV)

The first step to maximizing your banking app CLV is to understand its meaning and determine how to accurately predict it. 

A CLV is an estimate of the revenue that a customer is expected to generate over the course of their relationship with your app. It is crucial to be able to accurately predict your CLV in order to make informed investments in customer acquisition and retention.

A number of data points are considered when predicting CLV, including historical transaction data, demographics, behavior patterns, and even external factors such as economic conditions. For example, tracking customer engagement data like purchase frequency, average purchase value, and time between purchases can provide valuable insight into a customer's likely future loyalty.

• How to increase your banking app's CLV by 3x?

1) Personalized Customer Experiences

It is important to provide your customers with personalized experiences if you want to increase their loyalty.

You can tailor your app's features and services based on the needs, preferences, and goals of your customers.

Over time, increasing customer loyalty results in stronger customer loyalty as well as increased traffic and revenue.

By offering your customers customized budgeting advice, tailored spending limits, and customized savings goals, you can help them reach their financial goals.

2)Targeted Marketing Campaigns

Your marketing efforts can also be guided by CLV predictions. By tailoring your marketing campaigns to high CLV customers, you can avoid the one-size-fits-all approach. Identifying customers who will generate the most revenue, in the long run, will allow you to allocate your marketing budget more efficiently.

Your marketing efforts may also be targeted at a particular segment of users with an interest in high-yield financial products. Using this approach increases the chances of these customers converting and maximizes their ltv. Incentives, special offers, and discounts can be used to achieve this goal. Customer feedback should also be considered as the model is tuned and optimized over time.

3) Customer Retention Strategies

For increasing CLV, it is critical to retain existing customers as well as acquire new ones. It is possible to identify customers who are at risk of churn by predicting their CLV. To keep these customers engaged and loyal, you can implement targeted retention strategies when you recognize early warning signs, such as decreased app engagement and a drop in transactions.

Your predictive model may indicate that your customer is likely to stop using your application, so you can re-engage them with personalized offers. You will build a stronger relationship with your customers through this proactive approach, resulting in a higher Customer LTV.

4) Continuous Model Refinement

Continuously refining your predictive models is essential for accurate CLV predictions. The behavior of your customers and market conditions should be adapted as they change. Maintaining the predictive power of your models requires updating them regularly with fresh data and incorporating new features and variables.

You can benefit from B2Metric's adaptive machine-learning algorithms, which automatically adjust to changing patterns and trends. In a dynamic financial environment, this adaptive learning capability ensures that your CLV predictions remain accurate and relevant. In this manner, you can make informed decisions and optimize the performance of your banking app.

• How Does B2Metric CLV Prediction Work?

By using data analysis and machine learning techniques, B2Metric's CLV Prediction product assists businesses in forecasting the long-term or short-term value of customers.

Businesses are required to provide transaction history data, which includes transaction ID, client ID, transaction date, and product ID, as well as optional demographic information, such as age and city, in order to be able to utilize this product.

Following the provision of this data, users can choose various settings for modeling, such as the lookback window (how far back to consider in feature engineering) and the forward window (the time period in which to predict CLV). Furthermore, users can employ various methods for clustering values for customers with very few transactions.

There are three main approaches to CLV prediction: 

• Regression modeling based on historical data and user-defined windows.

• Using the Lifetime library in combination with RFM analysis, we developed a number of statistical approaches.

• Multiclass classification techniques are used to cluster customers and predict their future CLV.

Through B2Metric's dashboard interface, users are able to select and train models, assess their performance using metrics and visualizations, and examine transitions between CLV groups, trends, and model validation.

Business Insight:  

One of the most impressive features is the Business Insight Dashboard. Through this dashboard, you will have a comprehensive picture of your customer base, enabling you to understand their current CLV groups as well as future value predictions based on their transaction data. By using this insight, businesses can make data-driven decisions, identify high-value and low-value customer segments, and allocate resources efficiently.

Transaction Data: 

Based on historical transactions, the product determines how customers have interacted with your business. Marketing and retention strategies can be optimized using this information. Businesses can identify the most profitable products and services, and the most valuable customers.

Customer Mobility: 

Using the system, you can identify customers who might transition from one CLV group to another. It is possible to detect customers who are moving from CLV group 3 to 4. In order to encourage these customers to move to even higher-value groups, businesses can implement targeted interventions, such as special offers or personalized marketing campaigns. Customer lifetime value and revenue can be significantly increased through this proactive approach.

Achieving a 3x CLV for your banking app requires a multifaceted approach combining personalized experiences, targeted marketing, and customer retention strategies.  Furthermore, CLV predictions you improve your app's profitability while maintaining a long-term relationship with your customers, ensuring their loyalty and trust in your banking for years to come.

Let's increase your customer lifetime value. Interested in learning more? Check out B2Metric CLV product here and schedule a demo!