Retail Business Intelligence: How to Understand Your Customers [SLIDESHARE]
Multi-channel software gives you the tools you need to profile your customers and to leverage that information to create more loyal, more profitable customers
Good multi-channel retailers know how to deliver what their customers want when they ask. Great companies know how to deliver products before the client asks.
“You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new.”
But how can you know what your customers want before they do? With analytics!
One way multi-channel retailers can anticipate and stimulate sales is through the use of RFM scoring to segment customer groups for focused marketing efforts:
- R = Recency
How recently did the customer make a purchase?
- F = Frequency
How often does that customer make a purchase?
- M = Monetary Value
How much does the customer spend?
Why does this matter?
- Customers who made a recent purchase are more likely to make another from you in the future
- Customers who purchase frequently are more likely to make repeat purchases
- Customers who spend the most in total are more likely to come back to you repeatedly.
Catalogue businesses have been operating successful RFM strategies for years, often with nothing more than a spreadsheet or simple database.
For businesses operating multiple sales channels, a robust business intelligence tool is required to collate data from each of the channels for RFM analysis. Identifying customers with high RFM scores will help target future sales efforts and increase the ROI of each campaign.
“The purpose of business is to create and keep a customer.”
Peter F. Drucker - writer, professor and management consultant
What else do you get with multi-channel software?
- The tools to better understand your customers
- A transparent overview of the complete customer journey
- The ability to identify and resolve service bottlenecks, improve marketing and identify new sales opportunities.
RFM is a valuable technique for multi-channel retailers increasing turnover, improving business efficiency and improving customer service when underpinned by a suitable multi-channel software solution.