Question

A local hair salon is analyzing its customer data to determine the last time each customer visited the salon if he or she purchased a hair care product, and how much money the customer spends on the salon's services and products. In essence, it is trying to determine its customers' profit potential so it can target them for marketing efforts. What data analysis tool is the salon using?

Answer 1

Answer: Recency frequency monetary analysis (RFM)

Explanation: The hair salon referred to in the question is applying the Recency frequency monetary analysis to ascertain the value of each of their customers. This analysis checks the last time a certain customer came into the company, how frequent that customer comes and how much the customer spends on each purchase to know how valuable they are.