RFM Turned Upside Down

In other words, RFM is upside down!

Set a New Standard

The point is that a new standard must be set that goes beyond basing mailing decisions on simple response rates. Rather, with past buyers, mailing decisions should be based on the difference between the sales of customers mailed vs. sales in the same period from a control group of like customers who aren’t mailed. You need to financially justify the catalog mailing not on the absolute response rate, but on the differential achieved. To properly determine if a segment should be mailed in the future, as we did in the test above, create panels that aren’t mailed and compare results to those that were mailed.