RFM analysis sometimes echoes the famous Pareto Law, which states that 80% of the results come from 20% of the efforts.
When this law is looked at through the lens of marketing, it means that 80% of all your sales come from the 20% most loyal and repeat guests. Repeat guests will always have a high value on the revenue of the business, and therefore the return of these guests is extremely important for the metrics.
Pareto's law
The Role of RFM Analysis in Guest Returns
Small businesses regularly face the pressure of denmark mobile phone number list attracting new guests to the business, which in most cases determines the growth and development trajectory of the business. Attracting new guests often requires large budgets to implement.
No business can exist on its own without guests, so while attracting new guests is one of the foundations of a business strategy, guest retention plays an even greater role in generating high performance. Guest retention depends on guest satisfaction with your products, service, and all points of contact between the guest and your brand.
Low attrition is the easiest approach to expand a business because it relies on guest satisfaction and, therefore, good word of mouth. The RFM model allows businesses to create unique promotion funnels for different segments, creating value for guests and strengthening loyalty and trust.