A01 chaf6542 06 se fm indd

2 

Identify customer profile characteristics. This is a traditional segmentation based on the 

type of customer. For B2C e-retailers it will include age, sex and geography. For B2B com-

panies, it will include size of company and the industry sector or application they operate 

in.

3 

Identify behaviour in response and purchase. As customers progress through the life 

cycle shown in Figure 9.21, though analysis of the database, they will be able to build up a 

detailed response and purchase history which considers the details of recency, frequency, 

monetary value and category of products purchased. This approach, which is known as 

‘RFM or FRAC analysis’, is reviewed below. See Case study 9.1 for how Tesco target their 

online customers.