Calculating RFV

RFV = Recency, Frequency & Value.  Way back in 2008 the big phrase was lead nurturing.  In other words, preparing for the future by understanding where your potential customers were on the buying spectrum.  Did they even know they needed you or your product?  Or did they have to be educated first?  Were they in the research phase wherein they wanted info but not a strong sales pitch?  Etc., etc.  See my previous post, Understanding the Buying Spectrum, for more on this topic.  Fast forward to 2009.  All I've heard over and over and over again is "what can we do to drive sales NOW?"  Does this mean we're not nurturing anymore?  Probably not. We're just expediting the process by becoming more forward in our approach.  Yes, some prospects may be left behind, but tough times...  So here's what I am prescribing for my clients who insist they can't take a long view approach, but instead need sales NOW.  It's called the RFV, or Recency, Frequency & Value. 

What are your prospects' RTV scores?  It's hard to know that without the basic info.  In order to gather the basic info you will need, a survey is probably necessary.  4 questions is all it should take.

1. When was the last time your company purchased any of the following products or services? - list them out and provide time frames
2. Please select all of the products your company buys in a given year - list out all products and services to choose from
3. How many times per year does your company buy these products or services? - Give choices of a couple of months, 6 months, a year, more than a year.
4. How much does your company spend on these products and services in a given year? - Give choices of less than 10k, 25-50k, 50-100k, 100-250k, 250k+, or whatever scale fits your business.

Wow, pretty blunt right?  Ok, maybe.  But these 4 questions will give you the answers you need to evaluate RTV.  We know what products or services they buy, when they bought it last, how often they buy it and how much they spend on it.  Selecting the cream of the crop from these answers is not hard as you can imagine.

Now we can get back into nurturing mode, but this time we can blitz hard and fast on those prospects that are most likely to generate sales NOW.  Do I like the heavy-handed RTV approach?  Tough times...

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