Customer relationship management and control of the market

Customer relationship management: The objective of RFM is to determine which segment will continue to generate high profits in terms of sales for your company and should be treated differently in terms of marketing efforts / communications / messages.

Customers who have purchased recently or who made more purchases than other customers and of higher value are worth maintaining strong relationships with through marketing and sales initiatives.

 Customer relationship management and control of the market .

Potentially losing these customers could significantly impact the bottom line for your company.  RFM analysis can also highlight new customers who need to be further developed to become loyal customers, who can be nurtured, or who simply need to be welcomed if they're completely new.

This exercise can also identify customers who haven't upgraded for several  years and may have lapsed-IE, gone to the competitor-or customers whose purchases tend to be low value although frequent.

There are different marketing strategies, communications, channels,  and programs that can be used for each of the quartiles / segments:
  •  RFM value scores are calculated for each customer based on  the customer's entire purchase history.
  •  Each customer is ranked from high to low for each of the three  scores. Based on the ranking, customers are assigned to a quartile  for each of the scores. The top 25% receive a score of 1, and  the bottom 25% a score of 4. A score of 1 indicates the customer is ranked in the top quartile for that specific variable, and a score of 4 indicates the customer is ranked in the bottom quartile for that variable.
  •  Each customer is assigned a fourth, composite score, based on  their RFM value quartiles. The highest composite score that a  customer could receive is 1-1-1, and the lowest is 4-4-4.
  •  Finally, each quartile is subdivided into value ranges, depending  on the actual distribution of the RFM scores. These  subdivisions should be reevaluated periodically, preferably  annually or semiannually.
The database field you use to create RFM scores should include  the following:
  •  Recency: The latest order date in database, which should be  fed by invoice system or updated manually.
  •  Frequency: The latest invoice date with revenue;
  •  Monetary value: The annual monetary value to-date based  on revenue per customer annually. (Your organization needs to  establish how often to check these scores.)

Communicating with Loyal Customers to  Increase Satisfaction
Campaigns should include highly targeted emails, one-to-one  customer events, and high-value direct mail, plus rewards or incentives.

Focus high-value direct mail and loyalty efforts on customers  who generate revenue for your company, and direct high spending  toward high-profit customers. Lower-value customers may be targeted  with email or lower-value incentives.
Don't be confused by loyalty programs, such as frequent flyer  programs, that enable businesses to track transactional behavior and  award miles or points that can be exchanged for free flights, free calls,  Christmas vouchers, and the like.

The loyalty segment in your database  is based on B2B marketing loyalty, which is slightly different  from that which you experience as a consumer. Loyalty programs in  B2B are targeted at high-value segments within EMs with the aim of  increasing sales.

The biggest difference in the B2B world is that you as marketer  define (based on your data base information) your loyal customer segment.  Very often, this happens behind the scenes and without their involvement.

To make sure your loyal segment of data is defined  properly, work closely with your database team to analyze your own  database, because the loyal segment might vary between specific  campaigns. Campaigns are usually related to different products and  solutions. Your loyal customer segment won't stay consistent with each campaign or proposition, unless you only have one product / service.

Your committed customers should be predefined ahead of each  loyalty campaign. You should have good contact details for them or a  one-to-one relationship, so it's worth engaging with this group beyond  just an email, although online methods are still effective, for example,  highly targeted web conferences with video or TelePresence meetings,  where perhaps your executives could meet theirs, virtually. 

The  company may not have their own TelePresence suite; however, companies  like Cisco are making public TelePresence rooms available to  rent by the hour. Recently MTN Nigeria, part of the MTN Group,

Africa's leading mobile telecommunications company, 2 launched public TelePresence rooms in Nigeria in three areas in collaboration with  Cisco, which was a first for Nigeria! High-definition, virtual face-toface  meetings across the globe are no longer a future vision; they can  exist today.




  1. Costumer relationship is really important in any kind of business.

  2. Accountant Melbourne,
    It's the best way to keep customers
    Thank you for visit

  3. Thanks for sharing such a usefull informationYes customer relationship management is very important for all business.


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