Many businesses focus all their marketing efforts in generating new customer leads while at the same time neglecting the potential gold mine that exist with their current customers! Your promotional marketing plan should always include targeting your most desirable customers with relevant and timely offers.
To identify your most desirable customers I recommend you utilise the Recency-Frequency-Monetary (RFM) segmentation method.
The RFM segmentation analysis method will identify your most desirable customers from your current customers using three different lists, namely;
- Recency – to determine the time frame of orders from the date of your analysis. Your generated list must sort by the most recent orders first as your priority target.
- Frequency – to determine the number of orders that customers placed with your business. Your generated list must sort by the most number of individual order transactions in descending order.
- Monetary – to determine the total monetary value of orders placed on your business by your customers. Your generated list must sort from the highest total value to the lowest total order value.
Next, from these three lists select the top 20% in each of these lists. These will represent your most desirable customers who are potentially most inclined to act on a relevant and compelling offer from your business.
Let us know what results you have achieved!