Mining Your Customer Files

HOW TO USE VISUAL RFM SEGMENTATION

There are some wonderful, practical uses of this chart in a data mining or relationship marketing program.

Determine how deep one can mail in the next program. For example, by knowing the breakeven that will produce a 18 percent contribution to overhead and profit, we can mail those cells that meet our criteria and not mail those that don’t. If $3.00 sales per catalog is our breakeven goal to produces a 10 percent pre-tax profit, for example, we can draw the following “line in the chart.” You may elect to mail some of the marginal cells that are close to the $3.00 sales per catalog goal.