Question

OrdOnline, a pure click company offering online auctioning, decides to launch a promotional program to increase its sales. The company identifies customers who have made at least three purchases and spent at least $150 in the past six months and offers discount coupons to these customers.
Which of the following strategies is used here for targeting the customers?
A) viral marketing
B) objective screening
C) internal targeting
D) catalog marketing
E) RFM formula targeting

Answer 1

Answer:

The correct answer is the option E: RFM formula targeting.

Explanation:

To begin with, RFM is a method used, in the field of marketing, that focuses in the customer value and therefore its analysis. This type of strategy commonly appears in the database marketing and also in the direct marketing. In addition, RFM is the acronomyn that stands for the ''Recency'' of the purchase of the customer, ''Frequency'' of the purchases of the customer and last the ''Monetary Value'' that the customer spends on the business.

To sum up, it is understandable that a company that focuses in identifying the customers who have made at least three purchases and spent at least certain amount of money will center their strategy in the formula of RFM.