December 16, 2020
RFM analysis for customer segmentation and loyalty marketing
RFM (recency, frequency, monetary) analysis is a marketing technique used to determine quantitatively which customers are the best ones by examining how recently a customer has purchased (recency), how often they purchase (frequency), and how much the customer spends (monetary).
RFM segmentation is a powerful way to identify groups of customers for special treatment. Download the White Paper to discover RFM analysis, that helps you to evaluate which customers are of highest and lowest value to an organization based on purchase recency, frequency, and monetary value, in order to reasonably predict which customers are more likely to make purchases again in the future.
Why RFM analysis is an important and necessary tool for a business?
- It utilizes objective, numerical scales that yield a concise and informative high-level depiction of customers.
- It is simple – marketers can use it effectively for building personalized communication.
- It is intuitive – the output of this segmentation method is easy to understand and interpret.