Let's look at a practical example of RFM analysis used by a small company selling textbooks. Every summer the company sent out offers to buy their textbooks to their entire customer base. Each letter in the mailing cost 15 rubles, and the income from each sale was 550 rubles. Thus, three percent of positive responses would be enough to cover the cost of the mailing.
But for several years in a row, the response rate could not exceed 1.6%, so the mailing brought not profit, but loss. With the help of RFM, the company's entire client base was divided into 125 cells (5 x 5 x 5), for each of which the response rate was calculated. Subsequently, the mailing began to be conducted only for those segments where the response rate was high enough - from 3% and more. After that, the company's business went uphill.
However, RFM analysis is not suitable for bahrain mobile phone numbers database continuous use in business. If you only contact those customers who give the best response, then a huge number of potential buyers will not be reached at all, and your target group, tired of constant exposure, will respond much worse. Therefore, the communication strategy should include several options for offers: for active, regular buyers and for less receptive and interested ones (so that the latter understand that the company remembers them).
A widely used, shortened version of RFM analysis is called RF customer segmentation, where the sales amount indicator is not present (it usually depends on the frequency of purchases). With this method, you can easily and quickly find those customers to whom you should focus your efforts and create special offers for them.
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Why ABC Customer Segmentation Is So Important
Customer satisfaction (both corporate and private) is considered the main factor influencing the success of a company. That is why the motto “The customer is always right” is very common. But is this true for all consumers?
Blindly following this slogan is fraught with ruin for the business. The efforts of the seller should not exceed the potential contribution of the client to the company's profit, so the desire to satisfy all consumers without exception is an inappropriate expenditure of energy. A supplier who follows the lead of his customers in everything will very quickly lose control of the situation and find himself on the verge of bankruptcy.
How can one justify differentiation of clients and refusal to follow the wishes of each? First of all, by the capabilities of the company itself: no sales department is capable of serving all customers at the same high level (or it would be unreasonably expensive).
Not all consumers are active, and it simply makes no sense for a company to invest in relationships with them: potential costs, as practice shows, are always higher than the share of income from such clients in total revenue.
In addition, all customers have their own needs and expectations. Of course, a large customer
"How to increase the flow of customers by choosing the right method"
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