How RFM and address verification impact direct mail
Repeat customers are a direct mail marketer's best dream. As well as not carrying the costs typically associated with converting leads through mail, they've already showed a tendency or favor toward the brand, product or company. As simple as marketing to repeat customers is, there's an even better, analytical way to go about the process: RFM.
Tracking RFM gives marketers valuable data on how to market to established customers. Part in parcel to capitalizing on repeat customers is making sure a business' direct mail will reach them, which is why address verification software is hugely important.
RFM is:
• Recency: The time since a purchase. It's important to recognize purchasing patterns when evaluating recency. Marketers don't want to interrupt a profitable customer's behavior by sending them a mail piece that's outside of a cycle, thus throwing off the customer's normal purchasing pattern.
• Frequency: How often a customer buys from the business. Like recency, the same can be said for frequency, marketers don't want to mess with a good thing if the customer already demonstrates a frequent purchasing pattern. Trying to push them into more purchases may only irk the consumer instead. However, identifying high-frequency buyers can alert marketers to buyers who can be targeted for loyalty reward programs.
• Monetary: How much the customer spends. Monetary patterns can clue marketers in on which customers to target in order to increase a consumer's spent dollar volume and up the business' revenue. Consumers who are frequent, but spend modestly are prime candidates for an up-sell technique.