Analyzing Patients’ Values by Applying Cluster Analysis and LRFM Model in a Pediatric Dental Clinic in TaiwanReport as inadecuate

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The Scientific World Journal - Volume 2014 2014, Article ID 685495, 7 pages -

Research Article

Department of Business Administration, National Changhua University of Education, Changhua City 500, Taiwan

Department of Tourism, Leisure, and Hospitality Management, National Chi Nan University, Nantou 545, Taiwan

Received 24 January 2014; Accepted 26 May 2014; Published 19 June 2014

Academic Editor: Hyunchul Ahn

Copyright © 2014 Hsin-Hung Wu et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


This study combines cluster analysis and LRFM length, recency, frequency, and monetary model in a pediatric dental clinic in Taiwan to analyze patients’ values. A two-stage approach by self-organizing maps and K-means method is applied to segment 1,462 patients into twelve clusters. The average values of L, R, and F excluding monetary covered by national health insurance program are computed for each cluster. In addition, customer value matrix is used to analyze customer values of twelve clusters in terms of frequency and monetary. Customer relationship matrix considering length and recency is also applied to classify different types of customers from these twelve clusters. The results show that three clusters can be classified into loyal patients with L, R, and F values greater than the respective average L, R, and F values, while three clusters can be viewed as lost patients without any variable above the average values of L, R, and F. When different types of patients are identified, marketing strategies can be designed to meet different patients’ needs.

Author: Hsin-Hung Wu, Shih-Yen Lin, and Chih-Wei Liu



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