Using RFM as One Targeting Option

Abstract

Not all data mining solutions require tools with statistical analysis. Although we have focused much of our discussion on building predictive models, doing something simpler can in many cases be equally appropriate. A good example of this is the RFM index (recency, frequency, and monetary value); this index represents one nonstatistical method of targeting customers for a given business initiative. Here, the analyst can use three key pieces of information: