Knowing your customers buying habits can help you understand your customers in a whole new way. Segmenting them into groups will allow you to send each group different marketing material to get them back in store!
RFM helps you understand your customers on a whole new level. From measuring three simple things, how recent; how frequent/often and how much your customer purchases can tell you a lot about your customer base.
It then segments them into 11 different categories – based on these three behaviours. From this analysis, you can see at a glance the following
- Who are your best customers
- Who is on the verge of churning
- Who has the potential to be converted into more profitable customers
- Who are lost customers and need to pay more attention to
- Who are your loyal customers
- Who must you retain
- Which customers are most likely to respond to a marketing campaign
RFM’s model is based around the 80:20 pareto principle. 80% of the results come from 20% of the causes. So to structure it around your customers, 80% of your profits/revenue comes from 20% of your customers.
You may think sending out a generic email to your entire mailing list is effective, but in fact all your customers are different, with different wants, needs, desires, likes, dislikes. Different customers react to different messaging. A price sensitive customer may like a discounted offer, but a regular buying customer might get excited about a new product launch. Instead of sending out the same campaign to 100% of your audience, you need to identify and target specific customer groups based on their buying behaviours and who will make you the most profit. Understanding your customers is the key to making profit.
We have designed an innovative marketing tool to help get your customers back in store. We segment your customers into groups using RFM analysis, and from there you can send them our pre-built marketing campaigns via SMS, email or newsletter! You can also manage quotes you send to customers, and manage social reviews via Google, Facebook and TrustPilot.
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