Jim answers questions from fellow Drillers
(More questions with answers here, Work Overview here, Index of concepts here)

Topic Overview

Hi again folks, Jim Novo here.

The standard RFM customer model is essentially a “snapshot” of likelihood to purchase (and so perhaps also profitability of campaign) at a given point in time. But what if you took these snapshots and turned them into a movie, looking at likelihood to purchase over time, and what specific inputs affected these changes? Then you’d have a LifeCycle movie / model, which amplifies the power of RFM substantially. Ready to find out more? The Drillin’, the Drillin’ …

---

Q:  I am in catalog circulation.  We currently use RFM to segment the file and then roll the RFM cells into more manageable segments (this is a new technique to me, I am new to this company, in my former company we mailed by RFM segment).

A:  Hmm…this sounds like a “dumbing down” approach to RFM, but hey, if it works, why not.  Sometimes this is done because the customer base is not really large enough to support 125 segments, and the differences between the segments can become unstable and less predictive unless they are aggregated.

Q:  Because we are in a niche market and we saturate it pretty well, I would like to see which customers are on the edge or falling off (the Latency stuff) and which ones we can “reward” for being the best.  I do not think the RFM analysis shows me that amount of detail.

Continue reading New RFM: Snapshots versus Movies of Behavior →