By: Angela and Shayla

 CRM Is the process of analyzing the customer database and converting the data into information that will help retailers develop programs for build customer loyalty  Data Mining 1 approach commonly used to develop CRM information, identify patterns in data, and is typically they are unaware of prior to searching through the data.. Using the information retailers could increase sells by know what the customer likes and their buying patterns.  Market Basket Analysis Is a specific type of data analysis that focuses on the composition of the basket or bundle of products purchased by household during a single shopping occasion. With this analysis retailers determine where to place merchandise in a store. Example: Wal-Mart places bananas near baby items, in produce and sometimes by the front checkouts.

 Market Segments Groups of customers who have similar needs, purchase similar merchandise, and respond in a similar manner to marketing activites.  Professional Shopper vs. Occasional Shoppers Professional Shoppers are people who love fashion and value good customer service. ○ Targeted by using window posters that display expensive and fashionable merchandise usually in the evening Occasional shoppers are people who are too busy to shop, they want the shopping experience over as quickly as possible. ○ Targeted by using window posters displaying lower-price merchandise or sale items usually in the morning.

 Lifetime Value  Customer Pyramid  RFM Analysis

 LTV is the expected contribution from the customer to the retailer’s profits over his or her entire relationship with the retailer  Who is a better customer Person who spends $200 every month Person who spends $30 three time per week

 The realization is often called the rule 80% of sales or profits come from the top 20% of customers.  Lead segment is least profitable and can cost the company money  Iron segment are customers probably do not deserve much spend attention due to their modest LTV  Gold Segment have a lower LTV because they are more price sensitive  Platinum Segment typically are the most loyal customers who are not concerned about merchandise price and place more value on customer service Platinum Gold Iron Lead Least Profitable Customer Most Profitable Customers

FrequencyMonetary0-2 Months3-6 MonthsOver 6 Months 1-2 <$50 Over $50 First-time Customers Low-Value Customers 3-4 <$150 Over $150 Early Repeat Customers Detectors 5-6 <$300 Over $300 High-Value Customers Core Defectors Over 6 <$450 Over $450