Forum Discussion
Customer Migration Analysis
Hi, _Ester_
Based on your description, failing to understand the logic of achieving the goal
1. what is the categorization criteria for the number of purchases
2. what are the criteria for categorizing the number of months since the last transaction
3. still the same problem, the categorization criteria are not clear
Best Regards,
Yang
Community Support Team
- _Ester_2 years agoHelper I
Hello Anonymous , Thank you for responding!
Context:
I am trying to segment customers based on an RFM analysis (Recency, Frequency, Monetary - see below) and then understand how they move from one category to another on a month-by-month basis (customer migration analysis) to determine if my marketing strategies are effective.
Here are the RFM categories:
1. Assign each unique customer a category based on the number of purchases they've made up to that date.
Here the Frequency categories:
Number of purchases up to the current date <= 1: "NEW"
Number of purchases up to the current date between 2 and 3: "OCCASIONAL"
Number of purchases up to the current date between 4 and 7: "FREQUENT"
Number of purchases up to the current date > 7: "LOYAL"
2. Categorize each customer based on the number of months since their last transaction.
Here the Recency categories:
Months passed since the previous transaction (up to the current date) <= 1 month ago, then: "HOT"
Months passed since the previous transaction (up to the current date) from 1 to 6 months ago, then: "RECENT"
Months passed since the previous transaction (up to the current date) from 6 to 12 months ago, then: "INACTIVE"
Months passed since the previous transaction (up to the current date) > 12 months ago, then: "HIBERNATING"
3. Categorize each customer based on the total amount they have spent up to that date.
Here the Monetary categories:
Total sales up to the current date <=50 €, then: "COPPER",
Total sales up to the current date between 50 and 100 €, then: "BRONZE",
Total sales up to the current date between 100 and 200 €, then: "SILVER",
Total sales up to the current date >200 €, then: "GOLD"
IssuesI have no issues segmenting customers based on their current status; the real challenge arises when I want to conduct a customer migration analysis to find out HOW MANY customers move from one segment to another over time.
I believe I should have a calculated table with all combinations of date (all dates of the period) and customer_id, and include in the third, fourth, and fifth columns the calculation of the RFM categories (as if they were running categories).
However, I can't do this because it would affect the performance of the report.I've tried countless solutions, but I still can't find one that works.
Thank you for your help!