Estimating Incremental Lift in Customer Value (Delta CV) using Synthetic Control

203 · PayPal · Feb. 14, 2025, 9:05 p.m.
Summary
This blog post explains how PayPal employs causal inference and synthetic control to evaluate the impact of user actions and product adoptions on customer engagement and revenue, introducing the concept of Delta Customer Value (Delta CV) that measures the incremental profit margin from these actions over the first year. The methodology involves creating a synthetic control group using K-nearest neighbors to analyze user interactions and inform strategic decisions within PayPal.