ISSN 2167-0439
International Journal of Management and Business Studies ISSN 2167-0439 Vol. 9 (6), pp. 001-008, June, 2019. © International Scholars Journals
Review
A review of the application of RFM model
Jo-Ting Wei1, Shih-Yen Lin2 and Hsin-Hung Wu3*
1Department of Business Management, National Sun Yat-Sen University, Taiwan, R. O. C.
2Department of Leisure Studies and Tourism Management, National Chi Nan University, Taiwan, R. O. C.
3Department of Business Administration, National Changhua University of Education, Taiwan, R. O. C.
Accepted 09 March, 2019
Abstract
RFM (Recency, Frequency and Monetary) model has been widely applied in many practical areas in a long history, particularly in direct marketing. By adopting RFM model, decision makers can effectively identify valuable customers and then develop effective marketing strategy. This paper aims to provide a comprehensive review on the application of RFM model. In addition, this paper depicts the definition and the scoring scheme of RFM and summarizes how RFM model has been effectively applied in a wide variety of areas. Furthermore, this paper presents the advantages and disadvantages of the RFM model. The relative advantages and disadvantages of RFM and other models are also exploited. Finally, this paper describes the extended RFM model via a presentation of how RFM combines with other variables and models.
Key words: RFM model, literature review, customers, direct marketing, customer value, customer relationship management.