Identifying & Segmenting Key Customers for Prioritizing them Based on Lifetime Value using RFM Model (Case study: Internet customer of Qom Telecommunications Company)

Abstract

By the emerge of competitive markets and continuous changes, organizations have found that they are not faced with growing economy and markets, so each customer has its own special value. Therefore, they are trying to maintain and increase customer loyalty to increase their competitive advantages. In this regard, the present study aims to identify and prioritize key customers from about 37,187 customers in Internet segment in Telecom Qom province. The process is performed after determining RFM (Regency, Frequency, and Monitory) and the weight of each of these parameters was defined based on analytic hierarchy process and clients were based on a two-step clustering. The results of the analysis of characteristics of customers in 4 major portion of the clusters shows that cluster number 2 with the least number of customers and the most life time value has been known as key customers, and then its prioritization has been conducted. In the end of the research, some suggestions were presented to improve the relationship between customers and the companies.

Keywords

• customer lifetime value
• Customer relationship management
• customer segmentation
• Key Customers
• RFM Model