Cluster analysis using data mining approach to develop CRM methodology to assess the customer loyalty

Data mining (DM) methodology has a tremendous contribution for researchers to extract the hidden knowledge and information which have been inherited in the data used by researchers. This study has proposed a new procedure, based on expanded RFM model by including one additional parameter, joining WRFM-based method to K-means algorithm applied in DM with K-optimum according to Davies–Bouldin Index, and then classifying customer product loyalty in under B2B concept. The developed methodology has been implemented for SAPCO Co. in Iran. The result shows a tremendous capability to the firm to assess his customer loyalty in marketing strategy designed by this company in comparing with random selection commonly used by most companies in Iran.