RFM Segmentation Strategy
RFM (Recency, Frequency, Monetary) is a data-driven customer segmentation technique that allows marketers to make specific predictions about customer behavior.
The Three Dimensions
How long ago did the customer buy?
Customers who purchased recently are more likely to purchase again.
- Score 5: Purchased within 7 days.
- Score 1: Purchased > 1 year ago.
How often do they buy?
This identifies your most loyal fans versus "one-and-done" shoppers.
- Score 5: More than 10 purchases.
- Score 1: Only 1 purchase.
How much have they spent in total?
This differentiates your "big spenders" from bargain hunters.
Strategic Action Plan
Once your database is mapped into the RFM grid, apply these strategies:
| Segment | Description | Marketing Action |
|---|---|---|
| Champions | High R, High F, High M | Early access to new collections; VIP rewards. |
| Can't Lose Them | Low R, High F, High M | Personalized "We Miss You" coupons; Phone outreach. |
| About to Sleep | Low R, Low F | Low-cost re-engagement (Web Push or Social Ads). |
Automation Integration
You can trigger a specific Workflow the moment a contact's RFM status changes from "Active" to "At Risk."