A Fuzzy Linguistic RFM Model Applied to Campaign Management

Abstract

In the literature there are some proposals for integrated schemes for campaign management based on segmentation from the results of the RFM model. RFM is a technique used to analyze customer behavior by means of three variables: Recency, Frequency and Monetary value. It is s very much in use in the business world due to its simplicity of use, implementation and interpretability of its results. However, RFM applications to campaign management present known limitations like the lack of precision because the scores of these variables are expressed by an ordinal scale. In this paper, we propose to link customer segmentation methods with campaign activities in a more effective way incorporating the 2–tuple model both to the RFM calculation process and to its subsequent exploitation by means of segmentation algorithms, specifically, k-means. This yields a greater interpretability of these results and also allows computing these values without loss of information. Therefore, marketers can effectively develop more effective marketing strategy.