Database marketing is necessary to generate communication and interest with your current and potential customers, with regards to promoting your products or services. Clever storing, cleaning and manipulating of your data to find marketing opportunities fully utilizes your database marketing efforts, thereby making is easier for you to track it’s effectiveness.
A method called RFM (Recency, Frequency, Monetary Analysis) plays a major role in database marketing, as it helps in monitoring customer behavior and defining and targeting market segments. It helps you to keep track of how often a customer makes a purchase, how many and how much they’ve spent. It’s a valuable way of anticipating future actions by your current customers, those who will have a more positive response to your marketing efforts.
Analyze your Customers through Recency
Recency is how recent a customer, made a purchase. Its data is useful in evaluating how high the potential is, for a customer, to buy your product, again and again. Recent buyers will be more receptive than those that made a purchase a few years ago.
Analyze your Customers through Frequency
Frequency is the number of times a customer has made a purchase. Record the number of their bought items, the dates and tally them up. However, keep in mind that recent buyers might outrank frequent buyers in terms of being receptive to your promotional activities. Frequency might mean multiple purchases in the distant past and these persons might already have outdated contact information, which would be useless for your promotional campaigns.
Analyze your Customers through Monetary
Monetary is analyzing and coding customers through the amount of their purchases, averaging by the month, year or your preferred cycle. The biggest spenders might have the highest scores in your book but take note that, this doesn’t apply to all businesses. It’s like saying that a richer customer would respond better than a less affluent one, that has no basis at all.
RFM’s true effectiveness comes from systematically combining and examining the 3 data. Knowing who will be the most responsive customer will be an advantage to your marketing campaigns: there would be lesser degrees in wastage of material, time & effort. But do remember to allocate your promotional activities to other customers, as their case is not a hopeless one when it comes to your promotions and the ones who are in the top of your RFM data might wear out from your frequent campaigns.
Combine RFM with your other programs such as direct mail, email campaigns, newsletters, etc to have a more well-rounded database marketing campaign that hopefully would increase referrals, retentions and sales.
For more information regarding B2B contact database, visit our website at www.thenewlead.com or email your inquiries to marketing@thenewlead.com. We are currently on the final stages of revamping our new website so please bear with us as we slowly make the transition to the new website.
