Applying RFM model and K-means method in customer value analysis of an outfitter

Hsin-Hung Wu, En Chi Chang, Chiao Fang Lo

Research output: Chapter in Book/Report/Conference proceedingConference contribution

10 Citations (Scopus)

Abstract

This case study applies RFM model and K-means method in the value analysis of the customer database of an outfitter in Taipei, Taiwan. By considering gender, birth date, shopping frequency, and the total spending, six clusters have been found among 675 member customers from the company's database. In addition to the clustering analysis, different promotion strategies for the members of different clusters are provided. The analyses show that Clusters 5 and 6 are the two most important groups that the company has to devote resources into. Moreover, the company might ration resources for the customers in Clusters 1 and 2 because they do not contribute enough values to the outfitter.

Original languageEnglish
Title of host publicationGlobal Perspective for Competitive Enterprise, Economy and Ecology - Proceedings of the 16th ISPE International Conference on Concurrent Engineering
Pages665-672
Number of pages8
Publication statusPublished - 2009 Dec 1
Event16th ISPE International Conference on Concurrent Engineering, CE 2009 - Taipei, Taiwan
Duration: 2009 Jul 202009 Jul 24

Publication series

NameGlobal Perspective for Competitive Enterprise, Economy and Ecology - Proceedings of the 16th ISPE International Conference on Concurrent Engineering

Other

Other16th ISPE International Conference on Concurrent Engineering, CE 2009
CountryTaiwan
CityTaipei
Period09-07-2009-07-24

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All Science Journal Classification (ASJC) codes

  • Software

Cite this

Wu, H-H., Chang, E. C., & Lo, C. F. (2009). Applying RFM model and K-means method in customer value analysis of an outfitter. In Global Perspective for Competitive Enterprise, Economy and Ecology - Proceedings of the 16th ISPE International Conference on Concurrent Engineering (pp. 665-672). (Global Perspective for Competitive Enterprise, Economy and Ecology - Proceedings of the 16th ISPE International Conference on Concurrent Engineering).