Likelihood to Purchase
The likelihood to purchase indicates the high probability of some visitors who are more likely to make a purchase within an expected time frame. This kind of segmentation can be delivered by machine learning algorithms where it is possible to learn from buyer behavior and predict the probability of a purchase.
In digital marketing, acquiring new customers is becoming expensive, as lifetime values decrease Companies and agencies can use LTP segments to bring more conversions, improve ROAS, and optimize digital marketing budgets.
A customer’s lifetime value and likelihood to purchase can fall into one of three general categories: low, moderate, or high. Also, we’ll identify first-time customers as new as we gather enough data to classify them.
Here’s an overview of what each category indicates about your customers.
|Category||Customer Lifetime Value||Likelihood to Purchase|
|Low||Predicted future value is low||Least likely to purchase again|
|Moderate||Predicted future value is moderate||Might purchase again|
|High||Predicted future value is high||Most likely to purchase again|
Growth marketers can make use of high likelihood to purchase segments on ad platforms such as Google AdWords, Facebook Ads, and other digital marketing channels to turn more clicks into purchases.
As a digital marketer, the likelihood to purchase predictions allows you to decide how much of a discount you would have to allocate to a certain customer because people who are already highly likely to purchase won’t need an aggressive discount as that of customers who are least likely to purchase.