London Jets Case Study Solution , RFM Analysis

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London Jets Case Study Solution , RFM Analysis

London Jets Case Study Solution , RFM Analysis

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  • 1. Presented By: Abhinav Arya [email_address]
  • 2.
    • London Jets Hockey franchise facing low sales.
    • Management planning to sell off.
    • Mediocre results from high budget ad Campaign
    • Chris Harris, Marketing Manager, facing the challenge to revive the sales.
  • 3.
    • Improper customer segmentation
    • Inadequacy of customer data
    • Customer retention decreasing Y-o-Y
  • 4.
    • R – Recency, F – Frequency, M - Monetary
    • The basic premise of RFM is that customers who have purchased more recently, more frequently and have spent more with your company are your best prospects for future direct marketing campaigns.
  • 5.
    • RFM analysis is commonly performed using the Arthur Hughes method
    • helps marketers visualize and quickly identify important customer segments
    • explore the RFM segments in relation to other customer attributes
    • It is based on three simple customer attributes: R ecency of purchase, F requency of purchase, and M onetary value of purchase
  • 6.
    • This approach involves scoring customers based on each RFM factor separately. It begins with sorting your customers based on Recency, i.e., the number of days or months since their last purchase. Once sorted in ascending order (most recent purchasers at the top), the customers are then split into quintiles, or five equal groups.
  • 7.
    • 20% of the Top customers through Basic RFM ranking
    • Avg Age - 37 years
    • Avg Sales - $312
    • Avg Income - $44272
  • 8.
    • This approach is advocated by Arthur Middleton Hughes – one of the biggest proponents of RFM analysis. It begins like the one above, i.e., all customer are initially grouped into 5 cells based on Recency. The next step takes customers in a given Recency cell – say cell number 5, and then ranks those customers based on Frequency. Then customers in the 55 (RF) cell are ranked by monetary value.
  • 9.  
  • 10. Similarly, we code the other quintiles and combine the scores to obtain RFM values. “ 555” is the best score. Recency Frequency Monetary RFM 5 5 4 554 5 5 3 553 5 4 5 545 5 3 3 533 5 3 3 533 5 3 3 533
  • 11. As pre RFM, The highlighted income group should be the segment where more concentration is to be done.
  • 12.
    • Our most recent customers are 90% vehicle owners
  • 13. Married customers are high. More concentration should be on add-ons. Count of Cust ID   Recency           Sex Marital Status 1 2 3 4 5 Grand Total B (blank) 0.00% 50.00% 50.00% 0.00% 0.00% 100.00% B Total   0.00% 50.00% 50.00% 0.00% 0.00% 100.00% F Married 50.00% 0.00% 0.00% 0.00% 50.00% 100.00%   Single 42.86% 14.29% 14.29% 0.00% 28.57% 100.00% F Total   44.44% 11.11% 11.11% 0.00% 33.33% 100.00% M Married 0.00% 37.50% 12.50% 25.00% 25.00% 100.00%   Single 18.18% 9.09% 27.27% 36.36% 9.09% 100.00% M Total   10.53% 21.05% 21.05% 31.58% 15.79% 100.00% Grand Total   20.00% 20.00% 20.00% 20.00% 20.00% 100.00%
  • 14.
    • Issue discounts for the club memberships
  • 15.
    • Die Hard
    • Tourist
    • Miser
    • Flirter
  • 16.
    • For Married customers, couple passes, and play area for there kids. Happy meal are other good options.
    • Promotional giveaways by sponsoring companies that are announced at the game
    • To waive the membership fee to the fan club after so many games are attended.
    • Cross-sell merchandise
    • True fans of the London Jets
  • 17.
    • On arrival to the game VIPs could receive free valet parking and a coat check.
    • VIP section of the arena created specifically for higher paying customers
    • Complementary food and drinks be offered to the VIPs by a wait staff so that the fans would not have to leave their seats
    • We believe that the above strategies will help to get this potentially profitable segment to attend more games, and from there we can hopefully build some long-term loyalty.
  • 18.
    • THANK YOU