In the latest chapter, our CVO Guide delivered the answer to the question “Why do you need Customer Value Optimization?“
Let’s dive in deeper with this fresh intro into the RFM model groups.
When applying the RFM model, your customer database will split into groups. These groups need to be named by something that is easy to refer to: colors, fictional characters or anything else. The terminology is pretty important because you and your colleagues will speak the same language in meetings and discussions.
At Omniconvert, we defined these groups as Soulmates, About to dump you, Ex-lovers and so on, as in a relationship status. Because that’s what you need to get with your customers – a real relationship based on trust and commitment. We will take them one by one to discuss them and their application in eCommerce.
Each one of your customers will receive points from 1 to 5 (1 being the lowest) for Recency, Frequency, and Monetary based on buying patterns in relation to all the other customers. If you want to read more about how RFM scoring works, check this article.
This is definitely the group that every eCommerce shop wishes to have. They are the most loyal (they score 5 for Frequency), have a high AoV (5 for Monetary Value) and they even bought recently (5 for Recency).
They are probably not very numerous, but very valuable, so your purpose is to make sure you keep them engaged, transform them into brand advocates and bring more of them.
Goal #1 How do you keep them?
1. Appreciation calls
As they are not very numerous, you can pick up the phone and call them to show your appreciation and get even some feedback from them (as they know your business inside out).
How to do this? Download the .csv with the customers from this group in REVEAL and take notes about the sentiment and feedback you got from each of them.
Time investment: high
Money Investment: low
2. Email campaigns
Being so loyal to your brand, this group will expect to receive something customized accordingly. You can send email campaigns with exclusive deals only for them or special discount codes with their name. If you want to go the extra mile, do research on what categories they purchase from most often.
How to do this? Connect REVEAL with Klaviyo or Sendgrid and your Soulmates will automatically appear in the corresponding list that will be updated periodically. If you are interested to see what categories or products your Soulmates are buying, go to the Buying habits report to find out. Afterwards, create the email campaign with the offer and message you are planning to send.
Time Investment: medium
Money investment: low
3. Ads campaigns
Most e-commerce stores do remarketing advertising on auto-pilot for everybody, without any exclusion or segmentation. Orthey do a basic segmentation based on the customers’ stage in the conversion funnel (targets, prospects, buyer, etc). However, your customers find themselves in different stages in the Loyalty funnel and have different expectations. The Soulmates group will expect you to treat them totally differently than other customers. If you want to gain trust from them and convince them to buy, show an ad that is personalized for them.
“The <your store’s name> team wants to thank you for being so loyal to us! Here’s a discount on your favorite products!”
How to do this? By importing the list of your Soulmates customers in a custom audience inside your Advertising platform. In REVEAL, you can export the list of customers from these groups and then import them wherever you want.
Spoiler alert: REVEAL will soon have a direct integration with Facebook Ads and Google Ads
Time Investment: high
Money Investment: medium/high
4. Thank-you note in the delivery package
Check out first the “Chances to place the next order” report to find out the number of orders after which clients have higher chances to become loyal. That could be the 5th, 7th or whatever.
Take your time to write a letter, even a personalized one according to their order history (“Dear Elise, hopefully, the new juicer will make your mornings better, before jumping into work.”) and insert it in the delivery package.
5. Website personalized experience
Your Soulmates will be browsing your website and this is another low-cost opportunity. When they access the website, you can surprise them with:
- A special category for them with special deals
- A special message on the product page
- Simply show an overlay that thanks them for being loyal
Notes: If you have a Shopify store, you can add tags for each customer with its corresponding RFM group and then send this information to Explore.
Time Investment: medium
Money Investment: low
6. SMS marketing
SMS campaigns are cheaper than customer retargeting or social media marketing and very efficient (90% open rate). Although you can’t send SMSs every day, you can use this channel to surprise the Soulmate group with a discount, announcement or birthday gift.
How to do this? Exporting the list of Soulmates from REVEAL, you will be able to send SMS campaigns to them and impress your customers. Find the right hours and days to send the SMSs.
Time Investment: low
Money Investment: medium
7. Reactivation campaign
Your Soulmates group is fluctuating over time, which means some people will move from Lovers to Soulmates and vice versa. What exactly does that mean? It means that the scoring for Recency, Frequency and Monetary value has changed. That’s why it’s vital to catch them when they are prone to move to another inferior group or they have just moved to another inferior group.
How to do this? When you first set up the Soulmate group, you defined the interval for Recency, Frequency and Monetary value. When you do a reactivation campaign, you can consider the one you like.
For example, if you consider that a Soulmate usually buys in a 60 days interval, you can send the reactivation campaign on the 61st day (if they did not buy during this period).
You can also check the ADBT (Average Days Between Transactions) report in REVEAL and set up a threshold after which you need to send the reactivation campaign. Let’s say the ADBT is 29 days, you can set up the limit to 30, 31, 32 and so on. After the threshold, you are more likely to lose customers.
Time Investment: medium
Money Investment: medium
8. UX & CX survey
Your Soulmate customers have obviously different experiences with your company than a regular visitor on the website. They are usually more accustomed to your interface, but they also have more expectations than others: “Why is the checkout not autocompleting with my info? I’ve done this many times!”. The good part is that they are more open to answering your questions, so why not take advantage of it?
The best moment you can send this email is right after they purchased, on the Thank You page. Ask general user experience questions, but also questions that concern their experience as customers that have a history on the website (account and customer service related questions).
How do you do that? Connect REVEAL with Explore, so Explore can automatically match the groups and trigger a survey with the survey builder. Then you can send the answers to where you want through Zapier.
You’ll want to send this survey on email right after they receive their purchase when it’s still fresh in their minds. You will be particularly interested to find out how the product is, how the delivery went, the package, and so on.
How to do that? Connect REVEAL with Explore, so Explore can automatically match the groups and trigger a survey with the survey builder. Then you can embed the survey inside the email and send the answers wherever you want through Zapier.
Automatic pre and post-delivery Net Promoter Score is no doubt vital for eCommerce stores when you want to keep your Soulmate customers. Why? Because this will give you the big picture of their experience with your company.
Besides this, there is only a single number that you need to follow and not many data points that you have to put together to make an idea if something goes wrong or write. Not to be misunderstood, it is mandatory to do all sorts of customer research, but NPS is that one metric you can include in an eCommerce dashboard.
How to do this? Connect REVEAL with Klaviyo or Sendgrid and create the NPS survey from templates. The NPS score will appear in the REVEAL dashboard and in the Customer Voice reports once it is populated with data.
Goal #2 How to bring in more Soulmates?
- Create Lookalike Audiences
Import your Soulmates from REVEAL into your advertising platform and create a lookalike audience based on them. Similar people will be targeted and you will be able to decrease the CPC and CPA.
- Transform your Lovers into Soulmates.
The Lovers group is pretty warmed up, they ordered something recently so you need to increase their Monetary Value. To do this, you can come up with cross-selling during the next order and up-selling offers that are a good fit for their products.
Always keep an eye on your Soulmate customers, notice if the revenue and margin fluctuate over time, and see how the group performs compared to others. With REVEAL, you are able to track this in real-time, without missing any update about your customers.
Stay tuned for our next chapter where we continue to write about another RFM group, the Lovers!