RFM Customer Analytics

RFM analysis segments customers based on three key metrics: Recency, Frequency, and Monetary Value.

These metrics help business understand customer behavior and tailor marketing efforts effectively.

1. Recency (R)

• What it measures: How recently a customer made a purchase or interacted with the business.
• Why it's important: Recent customers are more likely to respond to promotions or offers.

2. Frequency (F)

• What it measures: How often a customer makes a purchase or interacts with business.
• Why it's important: Frequent customers are more loyal and ideal for upselling or retention campaigns.

3. Monetary Value (M)

• What is measures: How much money a customer spends within a given period.
• Why it's important: Higher spenders are more profitable and should be targeted with personalized offers.