Should all customers be treated the same?
Although all of the customers are venerable, to be honest, not all of them are profitable to spend tons of money to keep their loyalty. RFM is just an example of designing and categorizing customers table.
The customer table will show us the profitableness value of each customer, made by several factors. RFM stands for Recency, Frequency, and Monetary. Recency is about grading customers based on how recently they bought from us. Frequency is about the repetition of their purchase which can be an inevitable factor any organization should take into consideration if they determine to spend money on any customer retention campaigns. Monetary is how much money customers spend. Even though the significance of the Monetary is unavoidable, It is not the only factor in determining the customer grade.
All a customer table do is give you a wide berth of expanding in wain costs for customer retention as well as maximizing the efficiency of promotions. In other words, you will determine that investing in which group of the customers’ loyalty will result in desired and long-term financial feedback. Thereafter you will sink money into accurate targets with specific and right offers.
