RFM (recency, frequency, monetary) analysis is a marketing technique used to segment customers, by examining how recently a customer has purchased (recency), how often they purchase (frequency), and how much the customer spends (monetary).
The benefits of this analysis include:
- Visualising standard marketing analysis (such as RFM) provides better definitions of segments/buckets
- Quickly identify which customers are your most profitable or valuable
- It is clear to see (and understand) how different the segments are from each other
- Understand what ‘types’ of customers are in each segment
- Can be useful to help inform marketing and sales activities
- Tracking over time can bring a further layer to RFM analysis, answering questions like “how are customers moving between segments?”, and “which customers should be our focus for this month?”
CONTACT THE ANALYTICS AND DATA INSIGHTS TEAM