What is Frequency Marketing and Definition of Frequency marketing

Frequency Marketing is Marketing which involves rewarding customers for the volume or frequency of their purchases in order to enhance customer profitability.

Frequency marketing emphasizes the development and implementation of marketing strategies and tactics aimed at increasing the frequency of customer purchases, visits, orders, and the like in an effort to maximize the profit contributions of customers.

Frequency marketing can therefore involve a process of identifying ‘best,’ or most valuable customers, recognizing that the Pareto principle may apply to customer profitability (where, for example, 80% of the firm’s profits may be attributed to 20% of the firm’s customers). The practice of frequency marketing by many firms is typically through formal loyalty programs, which aim to encourage repeat purchase and increase customer retention.

Marketers concerned with increasing repeat purchases by customers valued by the firm may benefit from a greater understanding of the benefits, costs, and limitations associated with the practice of frequency marketing. For example, marketers should recognize that, while customers may increase their purchase frequency in response to a marketer’s frequency program and ultimately become habitual or steadfast buyers, it is also possible that customer loyalty may be short-lived among other customers, particularly if the frequency marketing programs of competitors become relatively more attractive to such customers.

The best way to apply this marketing strategy to your firm is to offer customers a discount or to offer them a freebie because of their repeated purchase. Off course, for this you need as good a CRM as you can get so that you can track the repeat purchases by customers.

Many retail chains as well as the “frequent air flyer miles” program is a part of frequency marketing. The cost of carrying out frequency marketing will always be lesser then the cost of customer acquisition. Hence, if you are spending 10% on customer acquisition, you should spend at least 5% on customer retention. And thus, you can award your customers on frequency, and retain more and more customers.

Also read – Strategies for Customer retention | Cost of lost customers | Customer defection rate