“To grow your profits, your number one job is to…”
That’s how Clayton Makepeace, the highest paid working copywriter, kicked-off one of the most valuable tips shared all weekend.
We were sitting around a rectangular boardroom table in one of the meeting rooms at the Lido Beach Resort in Sarasota.
At one end was me (Todd Brown), Rich Schefren, and Clayton.
Sitting around the rest of the table were about ten marketers who each paid 35K to be part of this high-level mastermind.
Mid-afternoon the focus shifted to how the big players of direct response increase backend profits.
That’s when Clayton said it…
“To grow your profits, your number one job is to increase the R.F.M. scores of your customer database.”
Yeah, I’ll get to that in one second.
Funny thing is: In over 13 years in the world of direct response marketing, I had never heard it quite put that way before.
But, I instantly recognized the gold in what Clayton was sharing. And I want you to recognize the same.
In the world of direct response marketing, R.F.M. stands for recency, frequency, and monetary value.
Recency is all about how recently a customer has made a purchase from you.
The more recent, the more valuable the customer is.
Frequency is all about how frequently a customer has purchased from you, or their quantity of purchases.
Just like with recency, the more frequent a customer has purchased or, the more purchases they’ve made, the more valuable the customer.
And, Monetary Value is all about how much money a customer has spent with you. Obviously, more money spent equals a more valuable customer.
R.F.M. scores, then, are how your customer database (e.g. your list of customers) rate, over the course of a particular period of time, in the areas of recency, frequency, and monetary value.
Let’s use the last four months as an example.
You can determine your R.F.M. scores by running some simple reports within your CRM to answer the following three questions:
1. What percentage of your customer database has spent money with you within the last four months? (Recency)
2. What percentage of your customer database has made at least three purchases from you within the last four months? (Frequency)
3. What percentage of your customer database has spent at least $X with you within the last four months? (Monetary Value)
Of course, the time frame, number of purchases, and dollars spent used are just for example purposes. You may use six months, ten purchases, and $XX dollars spent. Or different numbers. Every business varies.
Each of the three (R.F.M.), for your customer database, would get a score. A percentage.
And that score… that percentage... tells you exactly how valuable your customer list is.
So, once you have those scores…
Your job is to go to work increasing them.
Every month, every week, every day, your job is to think about how you can improve the recency score, the frequency score, and the monetary value score of your customer database.
Simply put: What can you do to trigger more customers to buy again, to get them to buy more often, and to get them to spend more money each time?
By focusing your daily attention on improving these scores, you will consistently grow your backend, your profits, and your take-home income.
Think of it like this: The higher your R.F.M. scores, the more money your business generates. Period.
So, what could be a better use of your time every day than working on increasing those scores?
Like Clayton said, that’s your number one job.