RFMC: a spending-category segmentation

With regards to an exceptionally competitive financial market impacted by legislative changes and with the evolution of customer's behavior, banks must provide customer-centric assistance, services and products. To understand their customers, segmentation is a classical technique where banks classify their customers following well-defined banking rules or customer profiles (RFM). In this paper, we propose a novel segmentation, called RFMC that better represents customers' behavior by using, not only customers' profiles but also a categorization of their spending. We show that, compared to the classical RFM-based segmentation, RFMC allows for advanced services that better fulfill customer's wishes, expectations and needs, by leveraging offers that fit their spending behaviors.