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Using RFM to Increase Your Sales
by Joe Gracia

Too often small business owners focus their time, money and energy on pursuing 'new' customers to the point that they overlook the tremendous sales opportunities that they have sitting right in front of them -- their current customer list.

The RFM system is a standard method used by savvy direct marketers to maximize their sales. They know how valuable their current customers are and they use RFM to maximize that value. Now you can apply RFM to your business too.

RFM stands for Recency, Frequency and Monetary.


The most recent purchasers of your products and services, are more likely to buy from you again.

To understand why, you need to understand what people are looking for when purchasing products and services.

-- They are looking for solutions to their problems.

-- They are looking for a product or service that they can trust.

-- They are looking for a company that they can get to know, like and trust.

-- They are looking for a company that will stand behind their products and services.

-- They want to avoid getting ripped off.

-- They want a happy experience.

-- They want to be treated like they are important to the companies they buy from.

-- They want to feel like they received more value than they paid for. (They want to feel like they got a great deal.)

These are just a few of the things that consumers are looking for when they purchase products and services.

If you provide these things to your customers -- and you should -- then each customer will associate these things with your business immediately after each purchase.

In other words, they are holding your company in a very positive light 'immediately' after a purchase.

There is no better time to sell something to someone than when they are already associating your company with the attributes they are looking for in a business.

At this point you don't have to convince them. They are already convinced.

But like all memories and feelings, they quickly fade as people move on to other things.

So it's important that you approach your most recent customers with an additional offer very soon after their purchase experience -- within a few days if possible.

You could enclose a flyer with a special offer on an additional product or service.

You could mail or e-mail them with your additional offer.

Or you could call them and let them know of your additional offer.


This may sound obvious, but it is often overlooked. Your customers who purchase the most frequently from you are customers to be treated with special consideration. They are also more likely to respond to offers you send them directly.

If you don't keep your customers and their purchase history in a computer database, then you are missing a tremendous opportunity to increase your sales.

A database is not that difficult to create or maintain, and it will prove to be an invaluable source of marketing information that can be used to help maximize your sales.

Determine which of your customers are your frequent buyers, and contact them with a special offer on your products or services. Let them know that they are Preferred Customers and that the special offer is not being made to everyone.


Your customers who spend the most money with your company are also more likely to respond to any additional offers you make to them.

Obviously they have overcome any skepticism or resistance in doing business with you, and this affords you a great opportunity to do even more business with them.

Again, your customer database will allow you to easily determine who your best customers are in terms of money spent with your company. You can then contact them with special Preferred Customer offers.

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