Which of the following schemes would the Mountain Equipment Co-op Catalogue most likely consider when segmenting customers?
A) CRM programs
B) Decile analysis
C) Customer pyramid
D) 80-20 rule
E) RFM analysis

Question

Quizplus · Accepted Answer

RFM (recency, frequency, monetary) analysis is a common segmentation method used in direct marketing and would be the most relevant for a catalogue company like Mountain Equipment Co-op. This method segments customers based on their purchase behavior and assigns a score for the Recency of their last purchase, the Frequency of their purchases, and the Monetary value of their purchases. This allows the company to target specific segments with tailored marketing messages and promotions. Other methods like CRM programs, customer pyramids, and decile analysis are useful for customer relationship management and high-level strategic planning, but may not be as effective for cataloguing companies. The 80-20 rule is a general observation that 80% of a company’s revenue comes from 20% of its customers and is not a segmentation method in itself.

Which of the Following Schemes Would the Mountain Equipment Co-Op