A New Approach to Customer Segmentation in the Fixed-line Telecom Using RFM Model

Abstract

<span style="font-family: 'Times New Roman','serif'; font-size: 11pt; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-GB; mso-fareast-language: EN-US; mso-bidi-language: FA;" lang="EN-GB">In today's competitive<br />environment, customers are the most important asset to any company. Therefore,<br />in order to retain customers, it is essential to understand</span><span style="font-family: 'Times New Roman','serif'; font-size: 11pt; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-GB; mso-fareast-language: EN-US; mso-bidi-language: FA;" lang="EN-GB">their<br />behaviour for developing </span><span style="font-family: 'Times New Roman','serif'; font-size: 11pt; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: FA;">effective strategies. One of the most common<br />methods for customer analysis is market segmentation that helps companies to<br />develop marketing technique by dividing market into several smaller homogeneous<br />groups. Optimized</span><span style="font-family: 'Times New Roman','serif'; font-size: 11pt; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-GB; mso-fareast-language: EN-US; mso-bidi-language: FA;" lang="EN-GB">market segmentation based on relevant attributes<br />help allocating company's resource. In this paper, we proposed a new<br />two-dimensional framework, in which customers was measured according to debt<br />and revenue status</span><span style="font-family: 'Times New Roman','serif'; font-size: 11pt; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: FA;">(The combination of both values<br />​​and anti-values)</span><span style="font-family: 'Times New Roman','serif'; font-size: 11pt; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-GB; mso-fareast-language: EN-US; mso-bidi-language: FA;" lang="EN-GB">, based on RFM model for<br />segmenting customers in fixed-line telecom. Finally, strategies are presented<br />for any customer group based on segmentation using data mining techniques.</span>