Great example of RFM (Recency/Frequency/Monetization) usage by La Quinta Hotels as seen in this article. In a nutshell, the analyzed all their data and found that, lo-and-behold, their biggest opportunities were moving F1′s to F2′s (F1 = Frequency 1, or nights stayed at the hotel, F2 = 2 nights, etc) and harvesting their R(max).
Once they had this data driven conclusion, they built a strategy using targeted email marketing. The results:
• F2′s increased 24%
• Attrition rate of R(max) decreased 20%
• R(max) membership increased 90%
Here is how you can use this information:
1. Find out who your most valuable customers are by analyzing your customer data and website analytics.
2. Setup a marketing campaign focused on those customers.
3. Measure the results and find out what works.