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How do you calculate likelihood of customer making a purchase, given past trends?

I know the average number of purchases each customer makes per month. When they signed up for our program and the date of the last purchase. How do I build a model to calculate the chance of them making a purchase in the next month?

1 Answer

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  • 7 years ago

    You need to use the Poisson Distribution

    P(x) = e^-u*u^x/x! where u is the estimate of the true mean and x is the number of occurrences

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