We want to maximize the value of each relationship and move more customers to the “best” segment, right? Why would you want to deliver the same message to every single customer on your list given what you now know about each person?
Let’s start with the low hanging fruit, which are the people that have a variation of two 3s and one 2 (i.e., 332, 323, and 233):
Keeping with the candy store example, for the group that has 3s for Recency and Frequency, but a 2 for Monetary value, we could deliver an email message offering a special 15 percent off coupon for a purchase of $60 or more. Sure, that’s a lot of candy, but maybe it’s right around Valentine’s Day or Halloween.
For the group that has 3s for Recency and Monetary value but not for Frequency, we could deliver an email message that includes a “Candy of the Week Club” that proves a special incentive if they join immediately.
For the group that has 3s for Frequency and Monetary value, but not for Recency, we could deliver an email message that includes a free box of chocolates if the customer visits that month (excess inventory at the end of its shelf life could make a great incentive here).
Okay, you get the point. We’re using our earlier analysis to determine the appropriate message to provide incentive for the recipient to take steps to move up to the next customer segment. Without this kind of analysis, you’re guessing as to whether or not your message is appropriate (or worse ...