List Management & Target Mailings

Some years ago during the list building section of the training seminar, a client mentioned how useful the List Management Module seemed because he could define and produce lists for mailings or e-mail campaigns, etc. based on all of the information that was entered through all their years of using M.O.M. The client asked about the purchase price of the module and I soon realized that it was already a part of his system. He’d just forgotten it was there! Good thing he came to training, for sure. But the issue speaks to those features of M.O.M. which are underutilized if they are used at all.

List Management is one of those features. It’s critical to ongoing marketing opportunities, but its full power isn’t always used. Want do to a mailing to your best customers? LMM can help define them so that can save on postage. Want to blast your customers a professional e-mail with graphics? LMM again.

There are several ways to determine who your best customers. You can define a list based on last date of activity or the money that a customer has spent. These are all well and good, but you can also assign a number to the customer based on three critical elements: how long ago a customer ordered, how often they ordered, and how much money that they spent. This is called RFM, or Recency, Frequency, and Monetary value.
Setting this up in the Maintenance function of LMM, RFM Analysis/Settings may take a bit of time, but the result is quick and easy to understand. Although the the format you use is open and flexible, don’t be worried by this openness. You can experiment and change values without harming anything.

An example of what a setting might look like is this:

A value of 0 – 99 can be used, with 99 being the highest ranked customer.

Create a new Recency value by setting up a value range of:

1 – 8 weeks ago = RFM value of 33
9 – 16 weeks ago = RFM value of 28
Etc.

Create a new Frequency value:
3 times in 2 months = RFM value of 33
2 times in 2 months = RFM value of 28
Etc.

Create a new Monetary value:
$400 – $600 = RFM value of 33
$200 – $399 = RFM value of 28
Etc.

So, a customer that has purchased $300 worth of merchandise across 3 orders within the last 2 months will be assigned an RFM rating of 94.
When you’re complete with your numbering range scheme, press the ‘Process’ button and M.O.M. will calculate an RFM value for all customers and enter the calculated number on each customer record in the middle of the ‘General Info’ tab. This may take several minutes.

Now it’s time to build a list. From the Include menu, choose Customer Names\Customer RFV Values and either choose a number range or a specific RFM rating. Remember, list queries can be run many times so that you can get just the list count that you want. Save the list, review the names, create the labels for the mailing, and you’ve completed your targeted marketing effort. Don’t forget to create a source key and add it to the list in order to track the effectiveness of your campaign and update the RFM before each similar mailing.

Check out any customer record and you’ll instantly see their numeric ‘value’ to get a quick picture of their ordering habits.

We’ll look forward to hearing about any other value ratings that are used by other M.O.M. clients.

Stephen Miller
Dydacomp Development Corp.


Tags: , , , ,

Leave a Reply

You must be logged in to post a comment.