How To Actually Use RFM For CRM
The idea of using RFM (Recency-Frequency-Monetary) analysis for Customer Relationship Management has been around for a long time. The reasoning is simple: identify the customers who are most likely to respond to your marketing promotions and your efforts are invested in the best return.
Recency — looks at the most current purchase information for a specific customer.
Frequency — looks at how many transactions this customer made in a chosen time period.
Monetary — looks at how much money this customer has spent on their visits.
From these data categories, it is possible to get a good picture of individual customers and groups so that you can determine meaningful actions, but something has to happen before the data is actually useful to you.
Software For Customer Analytics
In order to actually use RFM analysis in an efficient manner, software should be used. This speeds up the process of analyzing, categorizing, tagging, and filtering all the information. But that software needs to be adaptable for your own specific business and the particular assessment being done.
For example, when you identify who has made recent purchases, you have identified people who hopefully have good impressions of your business. Those who have made frequent purchases have a habit of buying from you and this is a habit you want to encourage. Often these customers are those who have spent the most money but there will be a difference between a customer who has spent a lot over time due to frequency and one who has spent a lot in fewer visits of higher purchase amounts.
Both types of customers are people you want to be loyal but different types of marketing promotions will appeal to them. The software you use to analyze this data will determine how effectively you can plan to reach each type of customer.
The reason why ChainDrive CRM/Clienteling software is effective is that it is designed to be an intuitive, integrated solution to the challenge of actually using things like RFM analysis in real life. The centralized database enables comprehensive integration of multiple channels, giving immediate access to shopping behaviors, buying habits, patterns, and trends that reveal the way your customers interact with your business.
You can collect all the data, analyze it the way you need it analyzed, and deliver marketing campaigns that are targeted perfectly. ChainDrive gives you the tools to actually use RFM for effective CRM.