ITPEC IP October 2018 Question 81
ITPEC IP October 2018 — Question 81 of 100
RFM analysis by customer is suited to evaluating retention of loyal customers. It scores customers using recency of purchase, frequency of purchase, and monetary value, allowing the retailer to identify active high-value repeat customers and track changes in their loyalty behavior.
Answer (a)
Why not others:
- demographics of new customers concern acquisition and profile, not retention
- POS analysis of new products evaluates product sales performance
- ABC analysis by store and product ranks sales contributions rather than individual customer loyalty
Key rule: RFM uses transaction history at customer level to segment loyalty and target retention activity.
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