Fuzzy RFM Analysis: An Application in E-Commerce

Abstract

RFM (recency, frequency, monetary) analysis is an essential tool for customer segmentation, which is very important for marketing, communication, and even operations management activities. RFM is a widely adopted segmentation tool since it can be accomplished by using purchase transactions. In this study, we use the purchase transactions of Modanisa.com, which is a global e-commerce website from Turkey, to build a fuzzy RFM module. In the first step, the transaction data is converted to R, F, M data parameters, and then the fuzzy c-means algorithm is used to build the RFM clusters.