Blog Archives

Calculating Customer Lifetime Value with Recency, Frequency, and Monetary (RFM)

December 23, 2013
By
Calculating Customer Lifetime Value with Recency, Frequency, and Monetary (RFM)

Introducing Customer Lifetime Value (CLV) Customer Lifetime Value is “the present value of the future cash flows attributed to the customer during his/her entire relationship with the company.”1 There are different kinds of formulas, from simplified to advanced, to calculate CLV.  But the following one might be the one being used most commonly:- Where, t

Read more »

Increasing Repeat Purchase Rate by Analyzing Customer Latency

August 28, 2013
By
Increasing Repeat Purchase Rate by Analyzing Customer Latency

For online businesses, Repeat Purchase Rate is one of the critical metrics of the business performance. Higher repeat purchase rate means more active members, and thus leads to higher profit. “Customer Latency refers to the average time between customer activity events, for example, making a purchase, calling the help desk, or visiting a web site”1,

Read more »

Identifying Potential Customers with Classification Techniques in R Language

August 12, 2013
By
Identifying Potential Customers with Classification Techniques in R Language

Data mining techniques and algorithms such as Decision Tree, Naïve Bayes, Support Vector Machine, Random Forest, and Logistic Regression are “most commonly used for predicting a specific outcome such as response / no-response, high / medium / low-value customer, likely to buy / not buy.”1 In this article, we will demonstrate how to use R

Read more »

RFM Customer Analysis with R Language

July 7, 2013
By
RFM Customer Analysis with R Language

For database marketing or direct marketing people, they are always concerned about two questions before they send out mails or make calls to their customers:- How can they segment the customers in the database to find out who are more likely to response to their mails or buy their products? Which type of customers they

Read more »

Uncertain Demand Forecasting and Inventory Optimizing for Short-life-cycle Products

June 6, 2013
By

For short-life-cycle products such as newspapers and fashion, it is important to match the supply with the demand. However, sometimes we order too little from supplier and sometimes we order too much due to the uncertain demand. We would lose sales and customers would be unsatisfied if ordering too little or we would let the

Read more »

Investment Portfolio Analysis with R Language

May 22, 2013
By

R has a wide application in finance analysis areas such as time series analysis, portfolio management, and risk management, with its basic functions and many professional packages in Finance. In this article, we will demonstrate how to

Read more »

Data Analysis for Marketing Research with R Language (1)

April 22, 2013
By
Data Analysis for Marketing Research with R Language (1)

Data Analysis technologies such as t-test, ANOVA, regression, conjoint analysis, and factor analysis are widely used in the marketing research areas of A/B Testing, consumer preference analysis, market segmentation, product pricing, sales driver analysis, and sales forecast etc. Traditionally the analysis tools are mainly SPSS and SAS, however, the open source R language is catching

Read more »