Ideas for Small or Start-up Catalogers (1,131 words)

Idea #4—Mail Your Customers Based on RFM

I can't stress enough how important this is. Even as a relatively new cataloger, you need to do a Recency, Frequency, Monetary value (RFM) chart to understand the health of your housefile and to think about how to move more customers up the ladder to better segments. An RFM segmentation enables you to mail to your best customer segments more often, and mail your marginal or unprofitable customer segments less. It will give you a road map for developing offers that target your unproductive segments and entice them to become better customers. In many cases, reactivation is more cost effective than prospecting. Even if you are so new that you're still mailing your entire housefile, make sure you can segment by RFM and update frequently—you will need it!