Book Excerpt: 'Libey and Pickering on RFM and Beyond'The process of direct marketing uses the vast universe of potential customers to create a growing sub-universe of active customers. Keeping those active customers active is the constant objective; otherwise they dissipate into the inactive state. Keeping an active single channel customer active is, however, very different from keeping an active multichannel customer active in all channels.
A migrated customer may, in fact, have dissipated into the inactive state in one or more channels, and that may or may not be a bad thing depending on the current state of channel behavior. If a customer migrated from the catalog and retail channels to only the web channel, but doubled the level of spending in doing so, then the migration was positive and the state of being was improved.
However, if that customer migrated and reduced the level of spending by half, then the migration was negative and the state of being was diminished. The point: It is no longer enough to measure the state of recency of the customer alone. The customer's recency must be qualitatively and comparatively measured and evaluated across all channels. And once the state of being is evaluated, it is necessary to determine where, when and how the customer should be directed in the future for a higher and more beneficial evolution of channel migration.
Libey and Pickering on RFM and Beyond Pages 17-26
Libey and Pickering on RFM and Beyond Pages 27-33
Libey and Pickering on RFM and Beyond Pages 172-177
Libey and Pickering on RFM and Beyond Pages 177-184