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Getting to Know Your Best Customers Using Our RFMX Tool
In our last blog post, we discussed how important it is to target your customers using a personalized approach. That not only helps align your offers with their interests to generate more sales (which you can measure against control groups), it also makes them feel valued and appreciated –- helping to build loyalty long term. With these goals in mind, the question then becomes, “How do we learn a little more about our customers in order to segment them accurately and effectively?”
 
One of the best tools to accomplish this in our CRM application is the Composite RFMX Analysis. This tool lets you rank the customers in your database based on how often they buy, what they buy, and how much they buy –- their frequency, monetary spend, and cross-category purchasing. By gaining insight into your customers’ shopping behaviors, you can target them for specific promotions that apply to their unique customer profile.
 
For example, you could email your top customers who have shopped frequently and have spent the most in the last twelve months to thank them for their patronage and offer them an incentive or reward. You can also find customers who performed very well in the past but who have not transacted with you recently –- which is a great opportunity to “revive” these once-loyal customers with a special offer and invitation to come back. In fact, target groups can be identified based on any of the composite categories, or a combination of categories. Once that’s done, the RFMX tool lets you pull these customers out and give them an attribute, or place them directly into a list, so you can easily build and execute your promotions.
 
Here are three quick tips when sending a marketing communication to a customer who was ranked by RFMX:
  1. Play Around: Try different combinations of deciles when defining the RFMX based on what you think your customers purchasing behavior might be like. By trying different combinations, you will get a picture of whether or not your estimate is correct.
  2. Isolate New Customers: Be sure to pull out your “New-to-File” customers from your RFMX report. They should be ranked separately from the rest of your database since they have not had ample time to build up their purchase cycle.
  3. Make your list and check it twice: When getting ready to export your newly selected customers for a promo, make sure to bounce them against your “emailable” or “mailable” criteria to ensure they have opted-in to receive the communication, and that their address is valid. You can do this either before or after the customers have been ranked.
The RFMX tool can be very valuable to you, because a “one size fits all” approach to marketing is seldom ideal. This tool will help you gain a better understanding of your customer base in ways that might surprise you. Furthermore, segmenting your database ensures that you are spending your marketing dollars wisely on the customers you want to communicate with – those most likely to spend their shopping dollars with you! You will strengthen your already existing relationships while fostering new ones.

For our clients who want to learn more about using this report in the application, please contact the CRM Services department and we’ll help you get started!
 
Posted by Celeste Pottie, Epicor Associate CRM Consultant

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