RFMR method

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The RFMR method is a marketing tool and is used for customer evaluation. The method was developed in the 1930s and is primarily used in mail order .

target

The RFMR method is used to structure customer groups; a ranking can be used to decide with reasonable effort who should and who should not receive an advertising mailing (e.g. a catalog). You want to reach customers who are very likely to buy.

An RFMR analysis can also be used as a controlling instrument. The customer development can be read off over time. Examples: "How many new customers were gained?" Or "Was it possible to increase the number of intensive multiple buyers?".

method

The following factors are assessed:

• R = Recency (when was the last order by the customer)
• F = Frequency (how often was ordered, related to the possible opportunities)
• MR = Monetary Ratio (what amount has been ordered so far).

Points are awarded for each sub-aspect, e.g. B. 0 to 40. The higher the individual values, the better. The total then reflects the individual utility value of a customer for the company.

After each customer could be assigned such a total value, you can now z. B. send a catalog to the 40% "best customers" by sorting all customers according to the RFMR value and selecting the first 40%.

Limits

The method is particularly suitable for short-term actions. Due to the necessary determination of point values, it is also not really objective.