RFM analytics helps answer important business questions
Most often, the RFM model is used to solve problems such as:
setting up highly targeted advertising campaigns;
development of effective mailings;
preparation of sales scripts;
creation of special offers and promotions for different groups of clients.
In addition, RFM analysis will help you notice a problem in time if it arises. For example, when there is a mass transition of customers from the "loyal" segment to "sleeping" or "left", you can conduct a survey and find out what they did not like about the product or service.
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The method can be used for any type of business, as long as it:
has a sufficient customer base - at least 1,000 people, and ideally more than 10,000.
sells goods at regular intervals.
Accordingly, RFM analysis is not suitable for a company that:
has a small client base - this is typical, for example, for startups and some B2B businesses;
offers products with a long purchase cycle, such as expensive or high-tech ones;
has a seasonal business - in this case, the purchase date will be tied to the senegal phone number list time of year, and not to the customer's needs.
RFM analysis is well suited for B2C companies that offer services or are engaged in retail trade. For example, for beauty salons, fitness centers, food delivery services, clothing or cosmetics stores.
In the B2B sphere, this method is used less often. This is mainly due to a longer purchase cycle. For example, a company usually needs a new website or premises for rent once every few years. This means that for customer segmentation, statistics for at least a decade will be needed.
If you have a small base or the sale lasts a long time, it is easier to analyze each client individually.
To segment customers using the RFM method, you need to complete three main steps.
Step 1: Collect Data
Download customer information from your CRM or other database that you manage. If you have fewer than a million customers, you can do this manually — use regular Excel or Google Sheets.
For large businesses, there are special platforms for managing customer data, such as Altcraft Platform or MindBox. With their help, you can automate RFM analysis.