What is RFM in marketing?

Dec. 19, 2018, 2:44 p.m.

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1 Answer


Dec. 19, 2018, 2:45 p.m.

Segmentation and targeting are alpha and omega marketing, and email marketing is no exception. Even if you have a client base accumulated over the years of work, fan mailings can do you no less harm than good. You need to be able to send exactly those letters that your customers will need and will bring you the necessary sales or, for example, register on the site without filling up your customers' boxes with unnecessary messages that they would perceive as spam. To do this, you must clearly understand to whom and why you are sending each of your letters. In classical marketing, there is a technique of RFM analysis, which is used to predict customer behavior based on his past actions. RFM - an abbreviation of the words Recency (novelty), Frequency (frequency), Monetary (attachments). > Recency is the time elapsed since the client’s last activity, be it a purchase, a link, or just a letter opening. > Frequency - the number of actions performed by the client. > Monetary - client's cash costs for the company's products and services. It is assumed that a client who has recently manifested himself, shows increased activity from the moment of his registration or spends more money on your products will be more interested in your advertising campaign. Separate communications need to be built with each group: setting up different advertisements for each group and make separate emails. For example, a group of customers who buy from you often and much can send special offers, and to customers who have not bought for a long time - a motivating discount, and target them with advertising. Therefore, from time to time it is necessary to revise the segments, to make RFM analysis in a new way. If you are a large online store with a huge number of customers and frequent purchases, you can update the data once a month or two. If customers rarely order, then updating the analysis once a quarter or even every six months will be enough. The meaning of the new RFM analysis is to see which of your customers have changed their status.