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The CLV retail transaction models (BG/NBD, MG/NBD, Pareto/NBD, and BG/BB) have strong population assumptions that may be violated in a hierarchical framework based on purchasing behavior (i.e., RFM segments), but could still work fine for geographical regions.
The GG spend model, on the other hand, works very well when fit to individual RFM segments. A hierarchical framework would allow information-sharing between these segments and be very useful if some segments have limited data.
The text was updated successfully, but these errors were encountered:
The CLV retail transaction models (BG/NBD, MG/NBD, Pareto/NBD, and BG/BB) have strong population assumptions that may be violated in a hierarchical framework based on purchasing behavior (i.e., RFM segments), but could still work fine for geographical regions.
The GG spend model, on the other hand, works very well when fit to individual RFM segments. A hierarchical framework would allow information-sharing between these segments and be very useful if some segments have limited data.
The text was updated successfully, but these errors were encountered: