Few understand how to use this data to understand their customer's buying habits. In this article, we will show how one company used their existing customer data to increase their average order size and make a whopping profit. The company uses direct mail to sell a consumable product.
Orders come in by phone and mail.
Their customers are both businesses and consumers. To create the data that are shown in this article, they built a database of 400,000 customers, over a three-year period. The database included, besides the customer name and address, the items purchased, the amount spent and the purchased dates. Using this information, they created RFM cell codes using a software package called RFM for Windows . Last fall they selected 45,246 customers from their master file, using an Nth, and mailed them an offer.