An Analytical Multiple Criteria Framework for Temporal and Dynamic Business-to-Business Customer Segmentation in Manufacturing

TL;DR

This paper introduces a dynamic, multi-criteria customer segmentation framework for B2B manufacturing, extending traditional RFM models with stability and growth metrics, and employing advanced analytical methods for robust, temporal analysis.

Contribution

It develops an innovative multi-criteria decision-making approach that incorporates stability and growth, integrating hierarchical processes and multivariate time-series clustering for enhanced segmentation.

Findings

Successfully segmented over 3,000 B2B customers in a real-world dataset.

Demonstrated robustness of the method to temporal shifts in customer behavior.

Provided decision support tools enabling domain experts to devise strategies.

Abstract

In sales and marketing, customer segmentation is an important tool for formulating strategies for customer treatment and supply chain management. Most segmentation implementations rely on limited criteria, such as recency, frequency, and monetary (RFM) modeling, which often fail to capture complex business interactions. In this work, we design and evaluate a dynamic multi-criteria decision-making (MCDM) method in a business-to-business (B2B) manufacturing context by 1) extending RFM to dimensions of stability and growth, 2) integrating an adaptive and analytical hierarchical process to match business objectives, and 3) evaluating multivariate time-series clustering models. We then measure customer stability, tracking between-segment transitions, and volatility over time, and apply a graph-based consensus model to further strengthen the analysis. We test the efficacy of the proposed method using a real-world manufacturing company dataset to segment more than 3,000 B2B customers, showing strong robustness to temporal shifts. The implementation enables domain experts with preferential analytics to devise their strategies, providing effective decision support for B2B customer segmentation.