Customer grading is one customer analysis that Repeat Customer Insights includes in its suite.
This is where each customer is graded with a letter grade based on their behavior:
- Grade A customers are your best scoring customers. These will include your VIP, loyal, and fans that you should cultivate.
- Grade B customers didn't make the cut for Grade A but are still above-average. They could include upcoming great customers that just need a nudge.
- Grade C customers are your average customers. They might be new customers without a lot of behavior, prior great customers who have since changed their buying behavior, or customers with basic buying behavior.
- Grade D customers are below-average customers. They might fall in here due to buying less frequently, a long time ago, or aren't showing the customer behavior of your better customers.
- Grade F customers are your weakest customers, behavior-wise. They might include defected customers or one-time buyers.
The benefit of this grading over something like RFM is how simple it is to understand. Only five segments. Customers gradually improve from F to A with good behavior. They decay from A to F with bad or no behavior.
It's also easy to compare customers against each other. An A customer is objectively better than a B customer.
Eric Davis
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