Determination of customer value measurement model RFM index weights

How to measure customer value and segment customers in order to do target marketing is a problem that many enterprises concern about. As a method of measure customer value, recency, frequency, monetary (RFM) had applied in many enterprises. Usually index weights of RFM model were determined by analytic hierarchy process (AHP) through expertsʹ scores, this method was affected by expertsʹ subjectivity. This paper presented a method of starting from enterpriseʹ sale data, constrained by the fact the sum of the index weights were 1. According to rule of the index weights of RFM under the biggest response rate were the enterpriseʹs best RFM index weights, objectively determined RFM index weights. This method made the determination of RFM index weights conform to the enterprise objective situation, thus it provided a feasible method for the enterprise customer management.