What is RFM Framework?

RFM stands for segmenting your customer base on Recency, Frequency and Monetary behaviour taken together. Looking all of them together for a single customer is a key, otherwise it will be imbalanced.

Recency -

How recent the interaction / behaviour shown by the customer.

Taking purchase behaviour, when was the last order was placed? Taking visit behaviour, when was the last visit done by the customer on website / app?

Frequency - What’s the frequency of the behaviour shown by the customer.

Again, taking purchase behaviour, how frequently customer places the order in a given time frame? Taking visit behaviour, how frequently customer visits the website / app in a given time?

Monetary - What’s the monetary worth of the customer during the journey.

Taking purchase, we can include the total life time value of the customer. Taking visits, we can include the total ad revenue generated by this customer.

How To Do RFM Analysis?

To get the RFM analysis for your customers, here are the steps -

  1. Take the customer data in simple excel or database with following fields
    • Customer ID
    • Last behaviour done date / time. Like last order date.
    • Total Interactions during time frame / Total orders in last year
    • Total monetary worth during time frame / Customer life time value.
  2. Give scale to the

Best RFM Segments

RFM Segments Targeting