Comments on: Recency Frequency and Monetization (RFM): Optimizing your notifications strategy

By: Ric

Ric — Sat, 26 Jul 2008 12:23:07 +0000

Thought provoking post Andrew, thanks. I think RFM takes on an interesting dynamic when you are spreading the customer cycle over either multiple products or additional incremental services. I am referring to the social space specifically. I believe that perceived and delivered value really is the lynchpin in ongoing marketing in that particular space. Would be interesting to see a post covering that overall cycle.

By: Rachanap

Rachanap — Thu, 24 Jul 2008 17:43:04 +0000

RFM is a good idea in theory, however, even in traditional marketing world, like in CPG, companies don’t have the bandwidth to adopt it, let alone successfully implement it. Implementing such a truly effective and scalable marketing system needs a tool in place for segmenting the data, an then group the users (often needing expensive software) as well as additional infrastructure to capture that data, neither of which is an easy task. For startups this would be difficult, given their low bandwidth. However, that said I do know of some startups in social apps space that have been able to successfully implement part of it… like just looking at one component like “Recency” to some success.

By: Q dub

Q dub — Wed, 23 Jul 2008 23:00:35 +0000

RFM alone is only part of the picture, what you’re really interested in solving for is the lift. 555’s have no potential for further lift, while 155’s need a reminder, 551’s need to be upsold, and 515’s need a sticky recurring relationship.

By: Another Andrew Chen!

Another Andrew Chen! — Wed, 23 Jul 2008 22:24:04 +0000

I agree with the general sentiment of the post, but how would you suggest a startup deal with the problem? Without the marketing budgets of larger companies and without the time to do detailed analysis of its customers, how can a startup find the best messaging and segmentation?

As many have mentioned, today companies are competing for people's time/attention, so proper messaging and segmentation are important. It just seems a lot tougher for a startup to employ some of these tactics.

By: Ted R.

Ted R. — Wed, 23 Jul 2008 20:57:25 +0000

I'll just throw a reminder out there that email delivery rates are awful once an IP is sending out more than 5k emails a day. Hotmail and Yahoo don't care who you are or how pretty your site is or how clean your record was one second ago.

So if you expect a large customer base, you'll need to know just because you planned it and sent it, doesn't mean they'll see it.

By: Ephraim Luft

Ephraim Luft — Wed, 23 Jul 2008 18:07:19 +0000

Hey Andrew – That’s a really interesting post. Thanks for bringing my attention to the document. It’s easy to understand intuitively that you need to manage churn and it’s great to see somebody provide more structure so that we can actually tackle the problem.