What is RFM?
RFM stands for Recency, Frequency, and Monetary value. Within our platform, each representing the following;
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If you want to know more about a customer's lifetime value, you can check the Frequency and Monetary value.
If you want to know more about a customer's engagement with your website, you can check the Recency, which affects the retention of a customer.
How do we measure RFM?
Now that we have explained what RFM stands for, the next step is to provide some information on how we measure RFM;
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With all of your customers (eligable for analysis) being placed in these segments, you can get a clear picture of what type of customer an individual is.
For instance; a person who places a big order of 300 EUR once every season, will have a lower F-Score and a higher M-Score than a person who places an order of 50 EUR once every month.
RFM Analysis Example
To get a better understanding on how exactly an RFM analysis work, we will take a look at the following customer set:
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