In Presidential Elections, it's no surprise that the candidates focus most of their budget, human resources, and time on battleground or "swing" states.
Why is that?
It has something to do with Newton's First Law of Motion:
An object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction unless acted upon by an outside force.
States that are historically Democratic will likely stay that way (i.e. - California, my state). States that have historically voted Republican will likely stay that way as well. But some states are up for grabs and swing so much that there isn't such historical consistency to rely on them to come through for one particular party.
In business, two of the most important factors that predict future customer behavior are recency and frequency.
Recency: How recent did the customer last purchase?
Frequency: How often do they purchase?
(You could substitute "purchase" for "vote" because this applies in politics as well).
On a scale of 1 to 5, let's say the most recent and frequented customers are 5 in each of those categories and the least recent and frequented customers are 1.
If you were running for President, who would you give most of your attention and resources to?
Probably not the "55"-rated States ("5" in recency, "5" in frequency) because they will likely "stay" in motion as Newton described and vote for you again. And even when outside forces are present, it takes a lot to stop the momentum of "commitment and consistency." Don't forsake them; simply keep them happy.
Likewise, probably not the "11"-rated States either (this mainly represents the opponent's supporters, especially if you segment out non-voters who would also technically make up this group).
That leaves people (or States) around the "33" mark, give or take. The middle. The battleground.
Now, apply this to your customer base and you'll get a matrix like this:
In business, there are philosophies that focus on BEST customers. There are reactivation strategies that focus on the WORST customers. And don't get me wrong, there are times and places for it all. But your focus should go to "middle-ground" customers and those likely on their way if no outside forces intervene.
Think about it --- a customer who is a "5" in recency (which means they JUST bought from you) and a "5" in frequency (which means they've bought from you A LOT) will probably keep going, pending that you've continually over-delivered and satisfied their needs. Wait until they show signs of slowing down to a "4" or "3" before you spend precious, limited marketing dollars (or offer unnecessary discounts).
Likewise, those who have been away for years (a "1" in recency) and never bought that much to begin with when they were active (a "1" in frequency) shouldn't get your marketing dollars. Chances are, they will stay at rest (Newton's same law, but also known as "Law of Inertia.")
It's the ones in the middle and the once "best customers gone bad" who have the most potential. To get those folks to the "44" or "55" territory would mean a visible change in your bottom line. Then, chances are, they'll keep buying (they make great continuity customers who will stay with you forever).
Recency is simple but not easy. ONE sale takes someone from a "3" in recency to a "5" because the only qualification is a recent sale. Upselling and exposure to backend offers and continuity eventually gets them to a higher frequency score. But frequency doesn't rise unless they remain recent.
So that means, it's your job to make sure a customer never slides down too far. In my home study course, we cover all these RFM metrics and how to pull this data out of Infusionsoft and other e-commerce systems.
It's said, "Where focus goes, energy flows."
Who are you focusing on?
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