The Ultimate Guide to RFM Analysis: 3 Major Indicators and 6 Brand Application E

1. Welcome to Bulk SMS Service The Ultimate Guide to RFM Analysis: 3 Major Indicators and 6 Brand Application Examples to Help You Accurately Focus on Your Audience! You may also want to conduct differentiated marketing and communication based on different customer values and characteristics, thereby improving resource allocation and maximizing the benefits of CRM. Among them, the RFM model is most commonly used by enterprises in practice. In this article, I will tell you the detailed steps of using the RFM analysis model to help you identify customer pain points and opportunities. I will also use 6 actual brand Bulk SMS Service cases to explain how you can break through pain points and seize opportunities after completing the analysis, thereby increasing customer lifetime value

2. (LTV) and improving the integrity of the customer relationship management system. Table of contents What is an RFM analysis model? 3 key dimensions, divided into 8 customer groups RFM and LTV have the same purpose: improving customer lifetime value should also start from these three levels How RFM analysis helps to accurately target audiences and discover marketing opportunities and pain points

3. 6 Brand RFM Application Examples: How to build a sound CRM based on opportunities and pain points? Start RFM analysis now and launch a successful CRM! The marketing company Invesp mentioned the following 3 key data in its research and analysis of old customer retention and new customer acquisition: (1) Existing customers are 50% more willing to try new products than new customers, and are willing to spend 31% more on new products. (2) The cost of acquiring new customers is more than 5 times that of retaining old customers.

4. (3) Every 5% more old customers retained can increase overall profits by 25%-95%. It can be seen from this that it will be a better resource allocation model for brands to invest resources in the analysis and retention of existing customers, and in-depth and long-term relationship management. The best tool to start customer structure analysis is the RFM analysis model. The RFM analysis model was proposed by George Cullinan in 1961, but its application has not become outdated, but has endured. In 1994, Arthur Hughes of the American Database Marketing Institute pointed out that there are three most important indicators in the customer. Database that can be used to analyze customer value. They are still used by many corporate brands today, namely: Recency: Last consumption time Frequency: consumption frequency Monetary: Single consumption amount We can divide customers into groups according to the "high" and "low" of R, F, and M respectively. By placing these three key indicators on the The above are the 8 types of customers classified by applying the RFM model. It is not difficult to understand that each of the 3 indicators has 2 categories, resulting in 8 combinations. However, although such

5. analysis is detailed, it is a bit complicated and difficult to understand, and is not conducive to solution planning. We are in <LTV customer lifetime value algorithm and cases: dismantling complex formulas to keep up with marketing trends! ＞As analyzed in one article, if the LTV calculation formula is disassembled, it can be found that as long as the three indicators of customers' "purchase frequency", "customer unit price" and "customer longevity" are improved, in other words - as long as customers consume more often, Spend more money per purchase and continue to spend for a longer period of time, and your LTV will naturally increase.

6. 6 Brand RFM Application Examples: How to build a sound CRM based on opportunities and pain points? The "purchase frequency", "customer unit price" and "customer longevity" in the above LTV formula are highly consistent and similar to RFM. "Purchase frequency" corresponds to Frequency; "customer unit price" corresponds to Monetary; and Recency (the most recent consumption time) can be used as one of the important indicators for predicting "customer lifespan". How RFM analysis helps to accurately target audiences and discover marketing opportunities and pain points? Recognizing the inseparable relationship between RFM and LTV, we understand the importance of RFM to customer lifetime value. In other words, if a company wants to increase customer (lifetime) value and create good CRM results, it must use RFM segmentation to point out the company's current customer group structure and analyze what pain points and opportunities it faces in each customer group. Only then can you take the next step. Next, let us take a look at the high and low levels of the three indicators R, F, and M in order, which opportunities and pain points represent respectively. Recency⬇ ⬇ Sleeper

7. Low Recency means that the last consumption was a long time ago. In marketing and CRM terms, low-recency consumers are also called “sleepers.” Sleepers may not interact with the brand for a long time due to various reasons, which is a pity for the brand. Therefore, the brand needs to understand the reasons why consumers are asleep. Recency⬆ ⬆ Active customers A high Recency means that the customer's last purchase was recent. It also means that the customer has a favorable impression of the brand recently, and the brand has the opportunity to take advantage of the trend. Customers with high Recency are also called "active customers". Brands should try to increase the proportion of active customers and reduce the proportion of sleeping customers. This will create a healthier customer structure and maintain a better brand image. Frequency⬇ ⬇ Rare customers Low Frequency means that customers do not consume frequently. However, infrequent consumption does not mean that there is no potential for frequent consumption. If the brand's proportion of rare customers is too high and the proportion of regular customers is too low, it may lack a stable source of revenue and have an unhealthy customer structure. Frequency⬆ ⬆Frequency

8. Frequency is high, which means they are frequent customers of the brand. Frequent customers of the brand are more likely to pay attention to the brand's updates. If F and R are both high, they can also be said to be highly loyal customers. These loyal customers are often the main members of the brand and become the focus of the company's membership management. Monetary⬇ ⬇ General customers A low Monetary means that the amount of money customers are willing to spend on each purchase on the brand is low. A customer group with low M and F will provide the brand with lower customer value, so the brand should try to improve the M and F of this group of customers. If it cannot be improved, you should not spend too much marketing resources on this group of customers. Monetary⬆ ⬆ Golden Guest A high Monetary means that the customer is willing to spend more money on the brand at one time and is also a prime customer of the brand. Customers with high levels of R, F, and M can be regarded as the brand's VIPs and important value customers. Because it provides the most value to the brand, the brand should make the most efforts to expand and retain these important value customers.

9. Finally, this article introduces the specific practices of some well-known brands based on the opportunities and pain points represented by the three indicators R, F, and M. RFM and CRM are inextricably linked. Finally, let us understand the 4 parts of RFM application through examples. They are the preparatory work of analysis and how to use digital tools to effectively improve the Contact Us Website: https://www.bulksmsmaster.com Telegram: https://t.me/latestdat Whatsapp: 639858085805 Phone: 639858085805 Email: info@bulkmailmasters.com Address: Blk 34 Lot 5 Easthomes 3 Subd Estefania, Bacolod City, Philippines,6100