Institute of Transportation, MOTC-Digital Archive-Transportation Dissertation-Application of RFM Model to Customer Classification and Customer Value in Airlines

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Transportation Dissertation

Title	Application of RFM Model to Customer Classification and Customer Value in Airlines
Year	2006
Summary	Student：Yu-Ting Tsai, 2006.06 Institute of Traffic and Transportation National Chiao Tung University 　　Due to the recession of domestic airline market and the introduction of High Speed Rail in 2006, it is expected there is an significant impact on the sustainable operation of domestic airlines. Facing the changing demand, the airlines adopt management strategies, providing high quality of services and aviation safety to enhance the customers’ satisfaction and reriding rate. This strategy of preserving the rate of current customers, and then increasing market share is the core value of Customer Relationship Management (CRM). 　　As far as CRM is concerned, it is a significant research issue- how to gain and to maintain the customer group who contributes the highest profit to airline. 　　Therefore, this research focuses on U airline’s domestic customers. RFM and the customers’ satisfaction for the quality of services are used as the variables of Clustering Analysis. After the tests of ANOVA and Scheffe’s methods, Customer Value Analysis can name different clusters of customers by the meaningful result. Besides, through demographics variables and consumers’ purchasing decision behaviors, each cluster’s variation and characters can be described. Then, in accordance with each cluster, different demands for the quality of different service can be realized through Importance Performance analysis. Through the computation of Customer Lifetime Value, the possibilities of making profits by improving some aspect of service quality can be found. 　　This research classify domestic passengers into five groups; Gold Customers, Higher-Ranking Customers, Potential Customers, General Customers and Unloyalty Customers, and treat High- Ranking Customers as target group. In Importance-Performance analysis, it is found that the significant service improvement include booking systems and punctuality. In the analysis of Customer Lifetime Value, the airline will make profit if they improve their booking service.

Title

Application of RFM Model to Customer Classification and Customer Value in Airlines

Year

2006

Summary

Student：Yu-Ting Tsai, 2006.06
Institute of Traffic and Transportation National Chiao Tung University

　　Due to the recession of domestic airline market and the introduction of High Speed Rail in 2006, it is expected there is an significant impact on the sustainable operation of domestic airlines. Facing the changing demand, the airlines adopt management strategies, providing high quality of services and aviation safety to enhance the customers’ satisfaction and reriding rate. This strategy of preserving the rate of current customers, and then increasing market share is the core value of Customer Relationship Management (CRM).

　　As far as CRM is concerned, it is a significant research issue- how to gain and to maintain the customer group who contributes the highest profit to airline.

　　Therefore, this research focuses on U airline’s domestic customers. RFM and the customers’ satisfaction for the quality of services are used as the variables of Clustering Analysis. After the tests of ANOVA and Scheffe’s methods, Customer Value Analysis can name different clusters of customers by the meaningful result. Besides, through demographics variables and consumers’ purchasing decision behaviors, each cluster’s variation and characters can be described. Then, in accordance with each cluster, different demands for the quality of different service can be realized through Importance Performance analysis. Through the computation of Customer Lifetime Value, the possibilities of making profits by improving some aspect of service quality can be found.

　　This research classify domestic passengers into five groups; Gold Customers, Higher-Ranking Customers, Potential Customers, General Customers and Unloyalty Customers, and treat High- Ranking Customers as target group. In Importance-Performance analysis, it is found that the significant service improvement include booking systems and punctuality. In the analysis of Customer Lifetime Value, the airline will make profit if they improve their booking service.

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