Nectar – Growth Marketing Studio
✅ The recency, frequency, and monetary model lets #eCommerce companies identify and market to specific consumer groups based on their transactional behaviour.
📌 The recency, frequency, and monetary-value model (RFM) gives merchants the ability to create segments around each customer’s #shopping behaviour.
1️⃣ Recency
The RFM model begins with “recency,” when a customer has last purchased from your business.
💰💰 The more recently a customer has made a purchase with a brand, the more likely s/he will keep the brand in mind.
👉 Establish what “recent” means to your #onlinestore.
📌 For example, you might create these recency groups:
0 to 30 days,
31 to 90 days,
91 to 180 days,
181 to 365 days,
More than 365 days.
2️⃣ Frequency
👉 “Frequency” in the RFM model refers to how often a specific customer purchases from your business.
✅ For example, an online store selling daily groceries might routinely make weekly #sales to the same customers.
3️⃣ Monetary Value
👉 For the monetary-value category, you might use the lifetime value (#LTV) of a customer, a customer’s average order value, or what a customer has spent in the past year.
🚀🚀 RFM model is a powerful tool for #marketing segmentation and #performance.
Without a defined, value-based goal for marketing and a strategy, new technologies, structures, and processes are unlikely to deliver significant improvements in business performance.
Focused on goal and strategy, you must create value for consumers as well as value for the company.
How to create value for consumers?
In order to attract, acquire, and retain customers, a marketing team can create value for them in three areas: exchange, experience, and engagement.
Create exchange value by effectively matching offerings to specific customer needs. That requires analyzing when customers are looking for a particular product or service, understanding what problem they are trying to solve, and figuring out what offerings will suit them best— all in real-time. It requires sharp conversion, personalization, and prediction capabilities.
Eliminate hassles and enhance satisfaction across the customer journey. That requires a focus on improving journey orchestration, value augmentation, and offering design through constant innovation.
Enhance the “meaning” of a company’s offering—how customers perceive the brand and their relationship with it. Create it by merging traditional techniques such as storytelling and public relations with dynamic content management systems that facilitate and sometimes automate the design and delivery of real-time messages.
How to create value for the company?
The marketing function can also contribute to growth by generating internal value for a company in three areas: strategic, operational, and knowledge.
Marketing teams ought to spot ways to expand current offerings and guide the development of new offerings and business models. To do this they need the ability to discover growth, build platforms, and leverage assets.
For example, Amazon’s advertising unit has reported revenue of $10 billion from product sponsorships, placements, the creation of brand-specific stores, and other efforts.
Marketing’s role in strengthening a company’s operating effectiveness has never been more important.
In its role representing the “voice of the customer,” the marketing function can create knowledge value through the astute use of data science. Marketers need to focus on customer-intelligence activities such as user-needs assessments and sentiment tracking.
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ACCELERATING ECOMMERCE MARKETING WITH “RFM MODEL” The recency, frequency, and monetary model lets #eCommerce companies identify and market to specific consumer groups based on their transactional behaviour. The recency, frequency, and monetary-value model (RFM) gives merchants the ability to create segments around each customer’s #shopping behaviour. Recency The RFM model begins with “recency,” when […]
WHAT IS NEXT FOR MARKETING? Without a defined, value-based goal for marketing and a strategy, new technologies, structures, and processes are unlikely to deliver significant improvements in business performance. Focused on goal and strategy, you must create value for consumers as well as value for the company. How to create value for consumers? In order […]