The RFMRv Model for Customer Segmentation Based on the Referral Value

The development of social networks provides numerous venues for customers to share their views, preferences, or experiences with others. Thus, the Referral programs have become the most valuable forms of marketing. Additionally, studies have emphasized the positive impact of referral programs on con...

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Bibliographic Details
Published in:Iranian journal of management studies 2024-04, Vol.17 (2), p.455-473
Main Authors: Mirfakhraei, Shokooh, Abdolvand, Neda, Rajaei Harandi, Saeedeh
Format: Article
Language:English
Subjects:
Advertising campaigns
Behavior
Communication
Consumer behavior
Consumers
Customers
Decision making
Market segmentation
Marketing
Marketing research
Purchase intention
Purchasing
Social media
Social networks
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Summary:The development of social networks provides numerous venues for customers to share their views, preferences, or experiences with others. Thus, the Referral programs have become the most valuable forms of marketing. Additionally, studies have emphasized the positive impact of referral programs on consumers' intentions to purchase products or services, which increases the need for considering referral value as part of customer value. Hence, this study analyzed customers' behavior in social media by extending the RFM model and proposing a new RFMRv model in which Rv is the referral value of customers. First, the customer graph of invitations was used to calculate customers' referral value. Then, the K-Mean algorithm was used to cluster customers based on the CRISP-DM methodology. Finally, the CLV for each cluster was calculated. The results indicated that the referral-acquired customers are more valuable than other customers and proved that the RFMRv model provides better clustering and valuation.
ISSN:2008-7055
2345-3745
DOI:10.22059/ijms.2023.329229.674722