The extended 3-letter acronym to drive retail direct sales

Analytics software is useful, but some concept of what should be analysed is also of value. Retailers will often create a RFV model, combining Recency (of last purchase), Frequency (regularity of purchase) and Value (either total spend or average order value, for example) to create a score for each customer.

We have found that adding additional elements expands the score from the 3-letter acronym to a multi-letter acronym such as RFVRCA where you add on the instances of Returns, Complaints and Abandoned on-line baskets committed by the customer.

This score then becomes a comparitor between customers, a selection criterion for campaign or proposition and changes in the individual’s score over time become a valid measure of success of the relationship.

Applying demographic, lifestyle and psychographic profiling provides an even more granular segmentation and the ability to apply the concept to prospects, with the benefit of making relevant offers to convert them to customers.

Such models can be created without investment in analytical software and can be applied in rules-based workflow and business process, with the dynamics regularly reviewed and the model(s) enhanced.

When is a prospect not a prospect? When they are purely a suspect (or at least have a pulse)!

Just think how leads come into your business.

Unlike traditional marketing where specific, targeted campaigns generate a qualified response, today a company’s broad presence on the web can mean that response is uncontrolled and is not necessarily representative of a valid lead for your sales operation. Potential customers today go online to research products and services, review recommendations and compare prices. This means an initial enquiry may not generate a sale for a considerable time and the enquirer can only be viewed as a ‘suspect’ – not even a prospect. 

So, once a ‘suspect’ is acquired, a relationship must be created to establish qualification and evaluate and build on the potential until such time as the lead is ready to be passed to sales. But what constitutes a ‘sales-ready’ lead? This is a strategic decision to be agreed upon between sales and marketing. Remember, it may vary by type of prospect, by product or market.

This ‘pre-sales’ process is known as Lead Nurturing and involves scheduled time or event driven communications aimed at establishing the prospect’s needs and delivering soft sell support, with appropriate messaging, landing pages, tracking and measurement.

These communications can take the form of blogs, newsletters, thought-leading statements and tailored, personalised messages, normally delivered via e-mail marketing techniques or social media.

Insight into the behaviour demonstrated by different profiles of suspects, prospects and customers will enable a company to build a lead nurturing strategy that ensures as many as enquire turn into customers or repeat purchasers as possible. The strategy also controls the level of resource used to convert the sale, meaning improved ROI.