Volume 33, Issue 1 (IJIEPR 2022)                   IJIEPR 2022, 33(1): 18-33 | Back to browse issues page

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Bakhshizadeh E, Aliasghari H, Noorossana R, Ghousi R. Customer Clustering Based on Factors of Customer Lifetime Value with Data Mining Technique (Case Study: Software Industry). IJIEPR 2022; 33 (1) :18-33
URL: http://ijiepr.iust.ac.ir/article-1-1124-en.html
Customer Clustering Based on Factors of Customer Lifetime Value with Data Mining Technique (Case Study: Software Industry)
Elaheh Bakhshizadeh1 , Hossein Aliasghari2 , Rassoul Noorossana 3, Rouzbeh Ghousi2
1- Tehran University
2- Iran University of Science and Technology
3- Iran University of Science and Technology , rassoul@iust.ac.ir
Abstract:   (2693 Views)
Organizations have used Customer Lifetime Value (CLV) as an appropriate pattern to classify their customers. Data mining techniques have enabled organizations to analyze their customers’ behaviors more quantitatively. This research has been carried out to cluster customers based on factors of CLV model including length, recency, frequency, and monetary (LRFM) through data mining. Based on LRFM, transaction data of 1865 customers in a software company has been analyzed through Crisp-DM method and the research roadmap. Four CLV factors have been developed based on feature selection algorithm. They also have been prepared for clustering using quintile method. To determine the optimum number of clusters, silhouette and SSE indexes have been evaluated. Additionally, k-means algorithm has been applied to cluster the customers. Then, CLV amounts have been evaluated and the clusters have been ranked. The results show that customers have been clustered in 4 groups namely high value loyal customers, uncertain lost customers, uncertain new customers, and high consumption cost customers. The first cluster customers with the highest number and the highest CLV are the most valuable customers and the fourth, third, and second cluster customers are in the second, third, and fourth positions respectively. The attributes of customers in each cluster have been analyzed and the marketing strategies have been proposed for each group.
Keywords: Customer lifetime value, LRFM model, Data mining, Clustering
Full-Text [PDF 870 kb]   (1279 Downloads)    
Type of Study: Research | Subject: Statistical Process Control Statistical Process Control or Quality Control
Received: 2020/10/8 | Accepted: 2021/11/30 | Published: 2022/03/10
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