Customer segmentation paying off for Shoeline.com
Segmenting its customer base according to the metrics of RFM – recency and frequency of purchase plus monetary contribution – and then using those segments to customize not only e-mail campaigns but agents’ approach to customers at its call center is paying off for Shoeline.com. Since going live with a new e-mail marketing and customer service approach based on RFM analysis last November, key indicators of repeat business from both its e-mail campaigns and sales generated at its call center are up, the online footwear retailer reports
The e-mail campaigns segmented by customers’ RFM scores have produced an open rate 118% higher and a conversion rate 18% higher than non-RFM-based e-mails, according to Frank Malsbenden, vice president and general manager. Though it’s in the works, not all of the company’s e-mails are segmented by RFM score yet, he adds.
The segmentation by RFM metrics extends to the retailer’s call center, where the RFM score of repeat customers is displayed on an agent’s screen when the call is connected. Giving agents the ability to personalize their approach with the customer, for instance by referring to and thanking them for past purchases, has had a positive effect, he says. 18% of the customers who have had contact with the call center since the RFM-based approach went live last November have purchased for a second time since then. That compares to a repeat purchase rate of 15% for the same period the previous year.
Malsbenden says RFM-based customer segmentation is helping the company not only to identify its most valuable customers and treat them accordingly, but also to do more successful marketing that pushes more of its customers into that high-value segment. Personalizing the outreach to repeat customers based on RFM score, both in its e-mail campaigns and at the call center, has increased the number of customers whose purchases qualify them for the most-valued segment overall by 59% since last November, he adds.
“Never again will a repeat customer go unrecognized by a customer service representative, and, soon, 100% of the e-mail we send will incorporate the RFM score for messaging theme and timing of delivery,” he says. Malsbenden adds that the customer segmentation system was created in-house.
Shoeline.com, which specializes in selling comfort brands, is a wholly owned subsidiary of Vision Retailing Inc., which operates several e-commerce sites and also consults with bricks-and-mortar retailers and consumer goods manufacturers.
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