Using a combination of RFM model and cluster analysis to analyze customers' values of a veterinary hospital

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Jo Ting Wei, Shih-Yen Lin, You-Zhen Yang, Hsin-Hung Wu

2020 IAENG International Journal of Computer Science Vol. 47 Issue 3 Article Cited by 10 Quartile

Abstract

The purpose of this study is to identify customers with different behaviors and then develop adequate marketing strategies to maintain good relationships with its existing customers and attract new customers for a veterinary hospital. A two-stage clustering method, the combination of self-organizing maps and K-means method, and RFM model are used to analyze customers' values from the transactions data focusing solely on dogs of a veterinary hospital in Taichung City, Taiwan in 2014. The results show that 4,472 customers are classified into twelve clusters, and seven out of twelve clusters are found to be the best or loyal customers. However, the other five clusters are uncertain customers. Among the five clusters, three clusters are lost customers and two clusters with relatively higher recency values than the average value can be viewed as new customers. © International Association of Engineers.

Affiliations

International Business Department, Providence University, Taichung City, Taiwan; Department of Tourism, Leisure, and Hospitality Management, National Chi Nan University, Puli Township, Nantou County, Taiwan; Department of Business Administration, National Changhua University of Education, Changhua, Taiwan; Department of M-Commerce and Multimedia Applications, Asia University, Taichung City, Taiwan; Faculty of Education, State University of Malang, Malang, East Java, Indonesia