RFM model: Apprentice

In the previous chapter, you’ve read about Ex-Lovers – an RFM group that was very loyal and profitable but is inactive and hasn’t bought anything from your e-store in a long time. We hope few or none of your customers end in this segment.

Here we are with the second to last RFM segment – the Apprentice. This group consists of new customers who just placed their new order so they are very important to your business. Your goal is to encourage the new customers to place their second order and increase the chances of transforming them into repeat customers.

Apprentices are hot customers (Recency score of 4-5), just placed their first orders (Frequency score of 1-3), so their order value (Monetary Value is 1-2) might change if you succeed to win their trust and generate the second purchase.

You can’t tell yet if these customers will become repeat customers so you need to invest more resources to build trust and generate a buying habit that, hopefully, in time, will transform Apprentices into power customers like Lovers or Soulmates.

How to get Apprentices to make the second purchase?

The chances to place the next order increase significantly after the second purchase. The ecommerce world is full of businesses that are so good at attracting new customers, but the real challenge is to keep these newly acquired customers coming back for more. Make sure you have the right tactics prepared for Apprentices.

Learn from your most valuable segments

You can find so many insights behind your first-party data and inspiration from your previous campaigns that had excellent results. Identify the efforts and products that generated repeat purchases into groups like Soulmates or Lovers. Use all this data to create messages that have the potential to generate second purchases among Apprentices.

Inform them about your loyalty program

You should make all new customers aware of your loyalty program from the first purchase. Loyalty programs are a great way to make customers feel important. Keep them engaged in the long term with all sorts of tactics, including gamification and exclusive content. Email is one of the most effective channels to enable the potential of a loyalty program, encourage repeat purchases and increase monetary value.

Reach out through email and remarketing campaigns

Create personalized emails based on their first purchase. You might be able to recommend complementary products to the ones ordered the first time. If your Apprentices don’t act after your email, don’t wait too long. You’ve got all the data you need to reactivate them through remarketing campaigns. Target them on various channels to increase the chances of seeing your ads/ messages.

How to transform Apprentices into your most valuable customers?

To transform your Apprentices into more valuable customers you need to build trust, therefore scatter their doubts and improve the score for all three factors used for the RFM analysis: Recency, Frequency and Monetary Value. After all, this is one of the main reasons why you started building an RFM model – to reduce at minimum the number of people that end in the problematic customer segments.

Personalized offers

New customers can be transformed into loyal customers when you prove that you care about their needs and tastes. Make good use of the data you already have about these fresh customers to create personalized offers. Send them the offers via email or on other channels where they are active. Pay attention to how they respond to your offers and use new insights to fine-tune your future offers. This will help you create better offers throughout your customer journey, which will reflect in improved customer experience and retention.

How to do this?

Connecting your Sendgrid account with Reveal allows you to push Net Promoter Score data to your email marketing platform. By connecting Reveal with your Klaviyo, you can push various data from your CVO tool to your marketing tool. This will allow you to send the right message to the right segment/ people and add new personalization options. To select the products for attractive offers, you can check the best-performing products and categories in the Catalog section in Reveal, and see the top-Brands in the Brands section.

A view of the Catalog and Brands sections in Reveal – you can select the best-performing items by order count, margin or revenue.

Customer Surveys

Listening to your customers’ voices is one of the most important things you can do to nurture a long relationship. Customers surveys help you capture honest answers right after an order is placed and shortly after the customer received her/his package. Their feedback is extremely valuable for your online store and most of your improvement decisions should be made based on what customers think, love, want.

How to do this?

You can send customer surveys automatically and measure Net Promoter Score by connecting Reveal with your Klaviyo or Sendgrid account. The NPS surveys will be triggered when a customer places a new order and after a customer receives the order. The Net Promoter Score is calculated automatically and you can see various metrics in the Customer Voice section in Reveal.

Cross-selling and upselling

Cross-selling and upselling prove to be extremely useful when customers are still learning about your brand and product range. Use it to your advantage and show them complementary products or higher-priced alternatives that will improve their experiences. Always emphasize the benefits they get by ordering an extra product or a higher-priced one.

How to do this?

In Reveal, go to the Buying Habits section and look for popular items among Soulmates and Lovers. By connecting Reveal to Explore app, you can show the product you want to push in the add-to-cart stage, in the checkout stage or show it in a pop-up.

A view of the most popular items among Soulmates as seen in Buying Habits section in Reveal

Subscription-based purchases

One of the best ways to maintain repeat customers is by offering them a subscription-based alternative. By analyzing customers behavior, you can already see if customers order the same products every month or after a certain period. This habit can be encouraged with subscription-based purchases to simplify the lives of your clients and the job of your employees. Customers love punctuality, you love predictability, so everybody’s happy.

How to do this?

Reveal pushes data to your Shopify account, so RFM tags are added to each contact in your Shopify CRM. This means that you can detect your Apprentices and when they reach the check-out stage, you can invite them to consider the subscription-based alternative.

If you feel like you need more tactics to retain your newly acquired customers, check the ones recommended for other RFM groups.

Using an RFM model helps you increase customer lifetime value but also helps you attract more qualified leads. RFM segmentation helps you create lookalike audiences based on your most valuable customers and optimize all processes that have a direct impact on conversion rates.