Email Marketing: RFM Analysis for Customer Segmentation


What is RFM (Recency, Frequency, Monetary)?

RFM represents a segmentation strategy that uses historical transactional data to help you segment your customers based on three variables: Recency (R), Frequency (F), and Monetary Value (M).

Recency (R) – how recently a customer has purchased from you;
Frequency (F) – how often a customer purchases from you;
Monetary Value (M) how much a customer usually spends.

RFM is one of the most popular segmentation models in eCommerce. All you need to identify your RFM segments is the historical customer data that you already have within your CRM or eCommerce platform.

What is RFM analysis?
RFM analysis is a technique for understanding and analyzing your customers based on three factors: Recency, Frequency, and Monetary Value. The goal is to predict which clients are more likely to buy again in the future.

You can perform RFM analysis:

Manually – using the good ol’ data exports spreadsheets, or
Automatically – using a tool that does all the work for you once you set the RFM scale for the R, F, M values.
For both alternatives, you first have to set the RFM scale and score according to your business size and customer lifecycle.

If you choose automated RFM analysis, setting the scale and scores represents all the manual work you’ll ever need to do. Your segments are constantly updated based on transactional data, so you can go straight to performing RFM analysis as often as you need.

What if I told you the RFM analysis is just a few clicks away, and it will help you shed some light on your customers’ behavior within your shop?

You can connect with Valentin here:

You can learn more about RFM segmentation and Omniconvert here: https://www.omniconvert.com/

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