Email: Complicated data is gathered on customers. Basics to start? (HK)
Agree. Lots of different data sets, lots of different products, lots of different geographies, lots of different customer segments. Prefer the simple idea of R.F.M – Recency, Frequency, Monetary Value.
Recency – last time someone made a purchase or did some kind of economically valuable activity. Maybe, took a sales call, visited the website. So, they did something to qualify as a potential to become a valuable customer.
Frequency – how many purchases have they made or how many economically beneficial activities have they engaged in over a set period of time (usually, 1-2 years)?
Monetary Value – pretty self explanatory. Overall or average monetary value of each sales transaction?
So, R.F.M – Recency, Frequency, Monetary Value are key metrics. We can start with something as basic as R.F.M. Plays a huge role in predictive analysis, as well (e.g. customer life-time value).