Recency, Frequency, and Monetary Value (RFM) has been a tried-and-true metric in consumer marketing for decades.
It is most valuable when used to predict the response from a marketing campaign. By scoring customers based on the recency, frequency and monetary value of their previous purchases, marketers can target the customers with the highest score and achieve a higher ROI.
The return is typically highest when marketing campaigns are relatively expensive, such as is the case with direct mail and catalog marketing.
WiseGuys has brought RFM targeting to the business-to-business marketing space, with a unique matching algorithm that helps B2B marketers grow their businesses.
Site RFM calculates RFM scores for the customer site – the account as a whole – which makes it possible to gain insights from the data that were not previously visible.
What appeared to be multiple small customers may indeed be parts of a large customer at the same location. This is especially useful for B2B marketers with high concentrations of individuals at a specific company or organizational site.
For instance, Melinda Gates from Microsoft may order only once, and will appear to be a small customer of yours (as displayed by Individual RFM scoring). She might be ignored by marketing staff as a “small fish.” But WiseGuys will group her order with Bill Gates’ purchases into a Site RFM score. Now it will be possible to predict the purchase behavior of the entire account in its entirety.
Understanding who your customers really are ensures your marketing staff will give Melinda Gates the royal treatment with your next promotion.
