The empirical study of applying logistic regression to escalate purchasing power

CRM is the process of controlling efficient, cost-effective flow knowledge to individual customers' requirements, and interaction with customers through channels for the purpose of escalating (he customer's lifetime value. In other words, product is the core business process of traditional marketing, while customer is the core business process of CRM. The former is concerned with which product is the best sales, the latter does which customer is faithful. In order to digest the individual customer, we should set up customer's perfect database which contains data of interaction with each customer, such as primary information, transaction, service, activities and the like. To evaluate the performance, we should forecast customer's buying preference; to trace the trailing, we should use Bob Stone's (1996) R-F-M criteria (recency, frequency, monetary amount) through database. The research collects and analyzes references on promoting buying rate; moreover, it introduces R-F-M criteria, brings up the idea of identify each individual customer to promote both the marketing profit and (he customer's lifetime value. The result shows that marketing performance derive from Logistic regression-weighted RFM model has the advantage over traditional RFM model by 11.06%.