Custobar’s RFM matrix removes the guesswork from customer segmentation
Retail’s greatest challenge
How do you tell the most relevant customers apart from the crowd, and how should you be communicating with them? It’s rare for retailers to have visibility over who their best customers are, when they have been active, and the revenue they bring in. Then there’s the question of which new customers might be guided towards becoming loyal devotees, returning time and again. And what about those historical VIPs who haven’t been active recently? Did we do something wrong? Everyone knows that these groups are different, and should be attended to differently – but in the retail setting there hasn’t been a tool to do it quickly through a simple, highly visual interface.
Custobar’s inbuilt RFM matrix allows you to identify your new, VIP, passive and “lost” customers based on when they have been active and how often they have purchased, and quickly launch campaigns to reach these different groups. You can identify and compare these groups and immediately see where the most revenue is coming from. Sometimes a surprisingly small number of customers can be responsible for the majority of your income, and those should be taken care of best. Now knowing exactly who they are – and keeping them happy – is a breeze.
It's not just about the numbers. The RFM matrix is extremely effective way to take rapid action based upon on your customer data.
What this lets you do
- Re-activate your passive customers before you lose them by sending targeted messages or even discounts. Even a simple request for feedback can be enough to bring a customer back.
- Ensure that recently joined customets make second purchase. Rinse and repeat until you have you next VIP customer.
- Encourage that first buy for customers who haven’t purchased anything yet, but have been browising a certain category. With Custobar this is a one-click operation.
- All customers in a matrix with no overlaps - identify new, VIP, passive and “At risk” customers instantly
- Follow the RFM globally, or on the level of selected target audiences (demographics, customer persona groups, loyalty program levels)
- See how large a share of revenue a certain group represents - follow the money!
- Launch activities for these groups directly from the RFM matrix. Quick action – quick follow-up.
RFM - The terminolgy
- Recency: The freshness of the relationship between your brand and your customer; when your customer last bought a product from you (online or offline)
- Frequency: The measure of demand; how many times your customers have bought from you
- Monetary value: This can be seen either as a monetary value or the proportional value of every selected group of customers compared to the rest