So, Jim is correct. Where I disagree with Jim is in the issue of economics. The reason for using RFM or predictive modeling is to increase profits. RFM is crude, but very cheap to do. To do RFM you do not need to hire an outside expert.
Any marketer can do it.
The coding of a file to create RFM cells is a simple matter for your programmers, or you may use an inexpensive PC package like RFM for Windows . The analysis is done on a spread sheet. Modeling, on the other hand, is sophisticated, usually takes a few weeks, cannot be done by an untrained marketer, and is usually somewhat expensive. A Practical Example Let's take a practical example to see the difference. Suppose that a marketer has 200,000 customers in a database, complete with previous purchase history.