2011 · 11 citations · 8 references
BusinessMarketingMarketing ManagementBankingMarket SegmentationMarketing StrategyConsumer SegmentationCustomer SegmentationDemographic SegmentationRfm AnalysisSegment EvaluationSegment ProfilingBusiness SegmentsCross-sell SegmentationCustomer Segmentation For Cross-sellingHigh-value Customer SegmentationMarket Segment ProfilingMonetary SegmentationUp-sell SegmentationValue Creation Potential
This study aims to determine bank’s segmentation based on recency, fre-quency and monetary (RFM), to analyze the correspondence between customers’ seg-ment and their demographic profile, and to determine marketing strategy based on customers’ segment and their demo-graphic profile. There are five segments of the customers based on the RFM scores, and as a result the bank should treat them differently. The first segment, the highest RFM score, is the most valuable segment to the bank but it includes only 5 percent of the total customers and amongst the outliers in terms of demographic profiles. This segment should be retained as high value creating customers and thus value enhancement through cross-selling can be exercised. The second and third segments which cover the majority of Simpedes cus-tomers (53 percent) have a relatively mod-est RFM scores. Value creation on this segment can take a double-track strategy, both cross and up-selling. Moreover, across Java and Outer Java, these seg-ments are associated to young adult ages or between 21 and 35 years old. Finally, the fourth and fifth segments are among the least in value creation and, therefore, the focus should be on up-selling via cus-tomer education.
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CUSTOMER LIFETIME VALUE (CLV) MEASUREMENT BASED ON RFM MODEL
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