GlossaryGrowth & Customers
RFM Analysis
Also called: recency frequency monetary analysis
What is RFM Analysis?
RFM analysis scores each customer on three axes — how recently they bought, how often, and how much they spend — and groups them into segments that deserve different treatment.
Why RFM Analysis matters
It turns a customer list into a priority list. The customers worth a personal call, a win-back offer or nothing at all are usually obvious once scored, and invisible before.
How RFM Analysis works in practice
Score each axis from one to five and combine them. High recency and frequency are your regulars; high monetary value with poor recency is the win-back list, and usually the most profitable campaign you can run.
Frequently asked questions
Only the customer identifier, purchase dates and amounts — a phone number at billing is enough.
Related terms
Cohort AnalysisTracking groups of customers who started in the same period.Customer Lifetime ValueThe total profit expected from a customer over the whole relationship.Retention RateThe share of customers who keep buying from you.Loyalty ProgramA structured reward for customers who keep coming back.