Analysis of Purchasing Behaviour of Customers in Restaurants Using RFM Model of Data Mining

Abstract

This study is focused on identifying existing customers who are most likely to respond to a new offer especially in service businesses. A restaurant with about 180 customers was used as a case study. A direct marketing model referred to as: recency, frequency, and monetary (RFM) analysis was used to identify customers that score 3 or more points for the RFM score. The analysis shows that 100 customers were qualified and these identified customers would be used by the restaurant management to plan its future advertising and promotion strategies.  Entrepreneurs in service businesses are advised to make use of the various direct marketing models to help them as a means to an end in planning their future advertising and promotion strategies for overall profitability of their businesses.