Strategic Database Marketing 4e: The Masterplan for Starting and Managing a Profitable, Customer-Based Marketing Program

every customer should have in his or her database records three single digits: one for recency, one for frequency, and one for monetary. Every customer is either a 555, 554, 553, 552, 551, 545, 544… down to 111.

The purpose of both modeling and RFM is the same: to increase profits by deciding not to mail nonresponsive customers.

you need to store one vital piece of information in every customer’s database record—the most recent purchase date.

Now that your file is coded for recency, go ahead and do a promotion to your customer base. Not a special test promotion, but some communication that you had planned to do all along which asks customers to respond or make a purchase. Keep track of which quintile every customer is in and which ones respond.

For a business file of 20,000 records, therefore, there probably should not be more than 20 RFM cells, each one having about 1,000

12 percent,

RFM is not as useful for e-mail marketing as it is for direct mail.

shopping cart within the e-mail.

possible for the reader to see, get information on, and place an order for any product or service offered by the retailer.