Customer value analysis using weighted RFM model : empirical case study

الملخص EN

The aim of this article is to provide a comprehensive methodology to perform customer value analysis.

First, we review the CLV concept, RFM model and other related concepts.

Then a case study for transactions database of a chosen company is presented.

We use Weighted RFM (recency, frequency and monetary) model to determine customers' lifetime value (CLV) and segment them based on k means clustering approach.

The relative weights of RFM model were determined by analytic hierarchy process (AHP).

Findings revealed that CLV analysis using RFM measures can help the company better understand its customers and locate the most profitable customers.

Therefore, the company can apply marketing strategies to maintain customer relationships more effectively.