Question: 3. Using the hard coding method of formal RFM analysis described in Figures 8.10 and 8.11 Chapter 8, score customers Kent and Mason below assuming

3. Using the "hard coding" method of formal RFM

3. Using the "hard coding" method of formal RFM analysis described in Figures 8.10 and 8.11 Chapter 8, score customers Kent and Mason below assuming today's date is 1/2000. Do you see a problem with this method of determining which customers are the most desirable? Explain. Customer Kent Mason Recency Last Purchase Date 12/1999 10/1999 Frequency (last 24 months) 13 5 Monetary Value (last 24 months) $455 $200 Exhibit 8.10 Recoding Rules Variable Recode Rules Recoded recency value = 20 points if last order was placed within the past 3 months 10 points if last order was placed within the past 6 months 5 points if last order was placed within the past 9 months 3 points if last order was placed within the past 12 months point if last order was placed within the past 24 months Number of purchases within the past 24 months x 4 points (maximum = 20 points) Dollars spent within the past 24 months x 0.10 (maximum = 20 points) Recoded frequency value = Recoded monetary value = Exhibit 8.11 Weighting Rules Variable Weight/Multiplier Recency value Frequency value Monetary value ww

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