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Bill Nicolai
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In the simpler days of yore, companies could use plain RFM segmentation to get most of the available sales from their housefiles. Today, however, consider a C-RFM-P segmentation structure with the following specifications:
C: channel of origin — generally store, catalog and Internet, but also can be others, such as TV or magazine advertising;
R: recency by discreet time bands, such as calendar season, but not with proximity to current date;
F: frequency of your total orders — 1x, 2x, 3x-plus;
M: monetary transaction value average; and
b>P: product dominant interest or trade style, such as tabletop vs. décor or sailboat vs. powerboat.
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Bill Nicolai
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