Title: Application of segmentation in customer relationship management: a data mining perspective

Authors: Jayanthi Ranjan, Ruchi Agarwal

Addresses: Information Technology Area, Institute of Management Technology, Raj Nagar, Ghaziabad, Uttar Pradesh, India. ' Birla Institute of Technology, Extn Center Noida, Mesra, Ranchi, India

Abstract: The term customer relationship management is synonymous in all business fields. It is the current buzzword in all firms world-wide. It has come to represent much of what used to be called one-to-one – marketing, along with ideas about sales force automation and customisation. Segmentation plays a leading role in every facet of customer relationship management (CRM). Customer segmentation refers to the process of dividing customers into mutually exclusive groups, presumably because customers within each group are more similar to each other than to others. Only through the application of segmentation can a large enterprise hope to turn the myriad records in its customer databases into some sort of coherent picture of its customers. All industries can take advantage of segmentation to discover discrete segments in their customer bases by considering additional variables beyond traditional analysis. This paper discusses the application of segmentation in CRM. The paper explores RFM analysis with empirical evidence.

Keywords: segmentation; customer relationship management; CRM; data mining; customer segments; clustering; RFM analysis.

DOI: 10.1504/IJECRM.2009.029298

International Journal of Electronic Customer Relationship Management, 2009 Vol.3 No.4, pp.402 - 414

Published online: 18 Nov 2009 *

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