- Home
- Business Plans
- Compensation Plans
- Financial Management
- Human Resources
- Web Marketing
- Marketing Analytics
- About Us
See our RFM Whitepaper online here.
Or, download your
RFM Whitepaper &
Case Study here!
RFM - Recency, Frequency and Monetary Value
RFM has been practiced by marketers since 1969 (State Farm Insurance). It is still practiced and provides great
value
today for small businesses and non-profits. As RFM became a more common strategy among large
companies in the
80's, leading companies looked for another edge -- this led to the adoption of data mining as a
standard today. Both
techniques return great value, but there are trade-offs involved. Data mining will result in
greater response and sales,
but
costs much more from a consulting standpoint. Data mining also requires
additional customer information that
many small
businesses have not yet been collecting about their customers.
Many businesses new to marketing analytics
are best off
trying RFM first and seeing real success, before making
even larger investments in data mining.
RFM - what's required...
Data on each of your customer's transactions --specifically, the date of last purchase and the revenue and number
of
purchases made over their lifetime with you.
Here is a look at response rates to a recent
campaign based on how
recently customer's 
made their last
purchase.
The
1/5th of
customers that
made the most
recent
purchasees had a
response rate
to a
recent
marketing
campaign of 3.5% --
more
than
double
any other group. And,
take a
look
at
Quintile 1 -- would you
really want to
even spend money mailing
or calling them?
Imagine how powerful this approach is
when
extended across the other two
dimensions
as
well, i.e., frequency and
monetary value.
RFM
also supports
breakeven analysis -- a
way to
incorporate
expected earnings from
responders, with
marketing and product costs,
to determine
how many customers should be
contacted
to break
even on your marketing
campaign
-- a great small business growth
strategy!
Call or email us know to learn how you can benefit from RFM analysis, 410.280.9618 (MD), 434-325-1439 (VA).
Serving everywhere, but specializing in: Annapolis, Baltimore, D.C. (410.280.9618) and Charlottesville-Wintergreen, VA (434.325.1439). Email us today
Web Marketing - Marketing Analytics - Business Plans - Compensation Plans - Financial Management - Human Resources
Member, Anne Arundel County Chamber of Commerce
Website design by, AscendWebMarketing.com