📊RFM analysis

segment your clients automatically by their purchase behavior recency, frequency, monetary value (rfm) definition rfm, also known as rfm analysis, is a type of customer segmentation and behavioral targeting used to help businesses rank and segment customers based on the recency, frequency, and monetary value of a transaction rfm marketing can help marketers and small business owners determine their target audience to use their budget most effectively rfm analysis methodology rfm analysis methodology this method gives customers scores based on 3 factors recency recency refers to how recent a customer's last purchase was customers who have made a recent purchase, typically within the last few weeks, still have the product and brand on their minds and are most likely to make a repeat purchase you can measure recency however you deem necessary for your business however, it's important to note that some companies might not have customers ordering every few days, weeks, or even months for example, a car company might sell a single car to an individual within ten years frequency frequency is how often the customer makes purchases, which can help you identify repeat customers for example, many clients make frequent repeat purchases within a set timeframe frequency is essential in determining the individuals most likely to continue shopping with your brand after their first initial purchase monetary value monetary value refers to how much a customer spends within a given period it's always important to consider because it can tell you a few things about consumer behavior for example, you might find that customers with the highest monetary value don't purchase items as frequently as others but typically buy the most expensive products when they do the values of each factor allow businesses to provide objective analysis and determine which audience to target for the most effective advertising and marketing campaigns most companies use a scale between 1 to 5, but you can use any values you think are necessary and helpful in evaluating clients loyaltydigital cards automatically segments your customer base by rfm analysis 0 to 30 days number of purchases from 0 to 3 rfm beginners number of purchases from 4 to 7 rfm growths number of purchases from 8 to 12 rfm champions 31 to 60 days number of visits 0 to 3 rfm doubtful number of visits from 4 to 7 rfm medium (borderline) number of visits from 8 to 12 rfm loyal regular 61 to 90 days number of visits 0 to 3 rfm sleeping number of visits from 4 to 7 rfm at risk number of visits from 8 to 12 rfm needs attention