Implement C-RFM to Suppress Keyword-Originated Buyers

Jul 09, 2007 8:40 PM  By

The C in C-RFM stands for channel of origin. With Internet so prevalent now, channel has to be added to the recency, frequency, and monetary trinity. After examining the results of many of our clients, it has become clear that most search-originated Internet customers are far weaker when mailed catalogs than are buyers whose first purchase was generated from a mailed catalog (and placed either via the phone or the Web).

Most companies now have enough Internet-originated buyers that suppressing some of the customers known to have come from sponsored keywords and natural search will likely not hurt sales much—but might save significant mailing costs. These “drive by” purchasers typically have little loyalty. Those who have made a second purchase after getting a catalog are probably similar to direct mail buyers, and they will not be suppressed from mailing.

To implement this strategy, look at your 13-24 month keyword single buyers and see if my supposition is correct. There is probably a dollar threshold where this applies—perhaps less than $50? If the current database will not support this examination, you have yet another reason to improve this capability. You might be able to evaluate this on an upcoming matchback at your service bureau. If this can be done, do it and look at the results.

If you cannot extract this data, but do know which buyers are keyword-originated, I suggest you assume that they are 50% weaker in response to a catalog mailing than direct mail-driven customers. Keep in mind that the Internet-originating buyers thus suppressed should still be used as a hitting file in the merge/purge. You do not lose all sales from these customers since by definition as Internet buyers, they should be on your email file, thereby assuring they get those promotions—and you can include them in cooperative database optimization models.

Bill Nicolai is senior partner at San Rafael, CA-based consultancy Lenser. For parts one and two of his three-part series on mailing adjustments to help mitigate the postal increase, read Adjusting Mailing Volume by Reducing Depth and Systematically Decrease Frequency to Weaker Buyers.