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Odels such as the Pareto/NBD (Schmittlein, Morrison, and Colombo 1987) and BG/NBD (Fader, Hardie, and Lee 2005a), as well as those of the associated models for spend per transaction (Schmittlein and Peterson 1994; Fader, Hardie, and Lee 2005b), we need an RFM (recency, frequency, monetary value) summary of each customer s purchasing behavior. In particular, The transaction- ow model requires three pieces of information about each customer s purchasing history: their recency (when.
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