RFM for Marketing eBook
Learn how RFM analysis can create advanced audience segments that re-engage lapsed customers and use previous behaviour to transform one-time buyers into brand loyalists.
What is RFM Analysis?
RFM analysis is a marketing database technique that assigns a score to each customer based on the Recency, Frequency, and Monetary (RFM) value of their interactions with your business. Using these scores, you unlock the ability to segment your audience and discover the brand loyalists, lapsing customers, and everyone in between.
How does RFM work?
Score
Give customers a score based on the Recency, Frequency, and Monetary value of their previous purchases
Segment
Use the RFM score of each customer to allocate them a segment that is appropriate to their purchase history
Discover
Using the advanced segments, track and discover customer retention levels from brand loyalists to churned
Deliver
Use the newly discovered insights to improve retention and reduce churn through personalised offers/messages
Score
Give customers a score based on the Recency, Frequency, and Monetary value of their previous purchases
Segment
Use the RFM score of each customer to allocate them a segment that is appropriate to their purchase history
Discover
Using the advanced segments, track and discover customer retention levels from brand loyalists to churned
Deliver
Use the newly discovered insights to improve retention and reduce churn through personalised offers/messages
Reduce Churn Identify Brand Loyalists Improve Retention with advanced behavioural segmentation
Knowing a person’s RFM score means that you can assign communications or automation capabilities appropriate to their relationship with you. For example, a high RFM score can indicate a VIP customer who deserves special treatment, while a low score may indicate a customer at risk of churning. This information can be used to provide VIP customers with exclusive offers, whilst preventing customers that are about to churn by sharing promotions with customers with low RFM scores.
