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Customer Relationship Management: Getting It Right! by Judith W. Kincaid

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17.6. Understanding the Tools

Often, we want to use calculations, statistics, and modeling tools to define and target the most actionable customer segments. We've discussed some of these tools already; now let's look at how and when they are used. Table 17-8 lists some of the most commonly used calculation tools.

Table 17-8. Segmentation and Targeting Tools
ToolDescription When to Use
ScoringRank customer's likelihood of response based on specific characteristicsTargetDevelop a ranking for customers based on some other attribute(s)
RFM (Recency, Frequency, and Monetary Value of Customers)Customers who have bought recently, who buy more often, and who spend more have been shown to be the most likely to buy againTargetPrevious behavior predicts future ...

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