B2C marketers often use a customer analysis model called RFM (Recency, Frequency, Monetary). The model is primarily used in database and direct marketing to identify and target customers with the highest propensity to purchase. It breaks down as follows:
- Recency: When did the customer last purchase? Customers who have purchased more recently are thought to be more likely to respond to an offer to purchase again.
- Frequency: How often do they purchase? More frequent buyers are thought to be more likely to purchase again.
- Monetary Value: How much has the customer spent? Higher spenders are more likely to purchase again.
For B2C marketers, analyzing a customer relationship against these three dimensions quickly provides a rough prediction of a customer’s likeliness to purchase, as well as an indication of lifetime customer value. But can this model be utilized in B2B marketing? Not necessarily.
B2B purchases are less frequent, and the decision-making process is much slower and made by multiple stakeholders, not individuals. However, with those points in mind, the RFM model can be re-imagined for B2B. By focusing on the “being at the right place at the right time” philosophy inherent to RFM, but shedding the urgency of “buy now,” you can morph the three dimensions into B2B marketing practices:
- Relevancy: Deliver valuable and helpful content to your target audiences. White papers, research and how-to articles transcend traditional marketing and position you as a potential strategic partner.
- Frequency: Maintain a level of market pressure that paints a clear picture of your capabilities, approach and philosophy in the minds of prospects. The intention is to build a predisposition for your products (and brand) before a prospect has even expressed a need for them.
- Recency: In this case, Recency is the sum total of Relevancy and Frequency. It’s all about being top-of-mind and well-positioned when a prospect need arises and landing you in the consideration set.
At the end of the day, it’s all about getting a seat at the table. So, while the RFM model may not directly translate to B2B – with the modifications above — I think it provides a new way of considering what it takes to get there.