Automated Segmentation using RFM
Recency, Frequency & Monetary (RFM) analysis is a behavior-based technique used to segment customers by examining their transaction history like
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How recently they've purchased?
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How often do they purchase from you compared to other businesses or websites that sell similar products/services?
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And what's the average amount spent per order?
It helps identify customers who may be more susceptible to promotions because of certain traits.
Champions
Bought recently, buy often and spend the most
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Potential Loyal
Recent customers sent good amount, bought more than once
About to Sleep
Below-average recency, frequency, and monetary values
Hibernating
Low spender, low frequency, and purchased long ago
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Promising
Recent shoppers but haven't spent much
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New
Bought more recently but not often
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At Risk
Spend big money, purchased often but long time age
Lost
Lowest recency, frequency and monetary values
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Loyal
Spend good money. Responsive to promotions.
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Needs Attention
Above-average recency, frequency, and monetary values
Can't Lose Them
Made big purchases and often but long ago
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