RFMR method

The RFMR method is a scoring model for evaluating customers or addresses, which is mainly used in the mail order business. The evaluation is based on three criteria:

  • Recency (last purchase date)
  • Frecluency (purchase frequency)
  • Monetary ratio (amount of sales)

These criteria are weighted according to their importance. The date of the last purchase is weighted most heavily because experience has shown that customers who have only recently bought have a relatively high probability of reacting to direct mail campaigns, ie presenting hot addresses. The individual customers or addresses are rated with points according to these criteria.

Für jede Bestellung gibt es umsatzabhängige Pluspunkte und für jede Werbemaßnahme werden kostenabhängige Minuspunkte berücksichtigt. Anschließend werden die Punktwerte pro Kriterium mit den entsprechenden Gewichtungsfaktoren multipliziert und dann addiert. Die Summe der gewogenen Teilwerte stellt den Ertragswert des betreffenden Kunden dar (pagatorischer Customer value).

Based on this customer evaluation, the following decisions can be made:

Customers or addresses whose value falls below a certain threshold are eliminated from the address list.

The advertising is focused on A customers who exceed a certain threshold.

Example:
With a direct advertising campaign to 20% of the customers, around 80% of the sales possible with all customers can often be achieved (Pareto principle). If one compares the advertising costs for the A customers and for the Bund C customers with the corresponding sales, the advantage of concentrating on A customers is shown by the favorable ratio between sales and advertising costs.

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