Chapter 6 Review
Recency, Frequency, and Monetary value (RFM) analysis is based on customer behavior. Use it to predict who will be most receptive to developing into a loyal, high Lifetime Value constituent.
Recency is the most powerful predictor of customer response.
The profits from RFM come in the form of higher response rates, greater LTV, and real dollar savings through efficiency.
If a customer pattern is broken, you should act immediately in an attempt to discover what instigated the change or to get the behavior back on track.
One of your marketing goals should be to identify the people who are taking your organization to the next level and develop more of these individuals.
As such, I recommend these three segments for every organization: the “best” constituents, the “almost best” constituents, and “new” constituents.
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