Profitable marketing comes from anticipating the migration of groups of customers so that the marketing and service dollars are spent on higher value customers who will, in return, improve their spending and retention habits. Marketing dollars are thus not wasted on lower value customers who are less likely to migrate up. Purchase transactions were summarized at a half year level for each of the four services. The analysis file included the summary transaction data along with other demographic or behavioral data such as SIC code, company size, age of account, discount status, and whether customers used a FedEx automation device for their shipping. The first step was to determine which products to use in the migration analysis.
Migration takes time.
The goal was to select customers who used the service over both of the two years. For this reason, these products were eliminated from the migration analysis. The purchase patterns of the customers were studied over the four half year periods. Total shipments during each half year period. The RFM score was then determined by multiplying each of the above scores for each individual customer.