Case Study: RFM Analysis Strengthens Eastwood's E-Mail Marketing Program
The test consisted of a single product offer at a discount. “Typically, we would’ve sent that deal to our entire list,” Kosciewicz says. “Autotarget narrowed the list to under 70,000. Sure enough, the results were really good. We hit our revenue target on a much smaller list by identifying customers who were engaged and most likely to respond.”
The RFM analysis revealed that 34 percent of Eastwood’s response came from the 4 percent of its customers with the highest RFM rankings. Furthermore, 57 percent came from the next 33 percent of highest-ranked RFM customers — leaving 63 percent of the customers generating only 9 percent of the response.
The findings prompted Eastwood to send daily e-mails to its best customers. And with a better reputation score, it sent re-engagement campaigns to lapsed customers without having to worry if it would be blacklisted.
“Even if less than 1 percent of your list re-engage, that pays for the whole effort because of how inexpensive e-mail is,” notes iPost’s Vice President of Sales Stephen Webster.
Autotarget’s RFM analysis encompasses all channels Eastwood markets in, including catalog. For example, it accounts for customers who were reminded they had a catalog when they got an e-mail, flipped to the catalog and called to place their orders.
As Craig Kerr, iPost’s vice president of marketing explains, Autotarget helps e-mail marketers when they’re using RFM analysis because offline teams use it anyway. “They can demonstrate the halo effect from using e-mail — what it does for purchases in other channels.”