Data Modeling and Analytics:
Do you ever ask yourself "If I could just find more customers like ______!"? The answer may lie in RFM scoring and data modeling. Simply put, RFM scoring allows you to identify your best customers, and data modeling allows us to target similar prospects.
RFM- Recency, frequency, and monetary scoring has been around for over 40 years. How does something last this long? Simple, it works!
Take your customer database and separate it into quintiles (20% bands). Customers in the top 20% of any category receive a 5, and the bottom 20% gets a 1. The model comes out looking something like this:
|
|
R |
F |
M |
Total Score |
|
Sally Love |
5 |
5 |
5 |
15 |
|
Bill Judas |
1 |
1 |
1 |
3 |
The above score would tell us that Sally has visited recently, purchases on multiple occasions, and spends a significant amount with you. Sally is a golden customer. Bill Judas purchased once a long time ago, purchased something inexpensive or on sale, and never returned.
Call Launch at (888) 384-5478 and we can walk you through our approach to RFM scoring and application.
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