Extensions to the k-Means Algorithm for Clustering Large Data Sets with Categorical Values
Data Mining and Knowledge Discovery
Constrained K-means Clustering with Background Knowledge
ICML '01 Proceedings of the Eighteenth International Conference on Machine Learning
Fast Algorithms for Mining Association Rules in Large Databases
VLDB '94 Proceedings of the 20th International Conference on Very Large Data Bases
Research on customer segmentation model by clustering
ICEC '05 Proceedings of the 7th international conference on Electronic commerce
Proceedings of the 13th ACM SIGKDD international conference on Knowledge discovery and data mining
Simultaneous Pattern and Data Clustering for Pattern Cluster Analysis
IEEE Transactions on Knowledge and Data Engineering
Classifying the segmentation of customer value via RFM model and RS theory
Expert Systems with Applications: An International Journal
Knowledge discovery on RFM model using Bernoulli sequence
Expert Systems with Applications: An International Journal
| Hi-index | 12.05 |
The RFM model provides an effective measure for customers' consumption behavior analysis, where three variables, namely, consumption interval, frequency, and money amount are used to quantify a customer's loyalty and contribution. Based on the RFM value, customers can be clustered into different groups and the group information is very useful in market decision making. However, most previous works completely left out important characteristics of purchased products, such as their prices and lifetimes, and apply the RFM measure on all of a customer's purchased products. This renders the calculation of the RFM value unreasonable or insignificant for customer analysis. In this paper, we propose a new framework called GRFM (for group RFM) analysis to alleviate the problem. The new measure method takes into account the characteristics of the purchased items so that the calculated the RFM value for the customers are strongly related to their purchased items and can correctly reflect their actual consumption behavior. Moreover, GRFM employs a constrained clustering method PICC (for Purchased Items-Constrained Clustering) that could base on a cleverly designed purchase pattern table to adjust original purchase records to satisfy various clustering constraints as well as to decrease re-clustering time. The GRFM allows a customer to belong to different clusters, and thus to be associated with different loyalties and contributions with respect to different characteristics of purchased items. Finally, the clustering result of PICC contains extra information about the distribution status inside each cluster that could help the manager to decide when is most proper to launch a specific sales promotion campaign. Our experiments have confirmed the above observations and suggest that GRFM can play an important role in building a personalized purchasing management system and an inventory management system.