Add Channel to RFM Segmentation to Boost ROI
Dear Dr. pROfIt: I segment my customers using a version of recency, frequency and monetary (RFM) value. With my typical RFM breaks, I like to overlay channel information, which I call “C.” I usually use the source of acquisition as my channel. For example, if I acquire a customer from paid search, I code the customer as a “P”; if I acquire a customer from catalog marketing, I code the customer as a “C.” I recently read that what a customer did in their last purchase is more important than how they were acquired. What's the right way for me to maximize return on investment?