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Recency, Frequency, Monetary (RFM) analysis -- who is familiar?

Recency, Frequency, Monetary (RFM) analysis -- who is familiar?

For Magento Business Intelligence users, and those Magento marketers using BI tools of your own -- is anyone currently analyzing your customer base with a variant of recency, frequency, monetary analysis

 

RFM analysis is a set of analyses that seeks to predict high-revenue customers by assuming future high-revenue customers:

  1. Have made transactions on your store very recently
  2. Have a regular frequency of purchases relative to other customers
  3. Have a higher average order value relative to other customers

Some of our Magento BI users develop a "score" to weight potentially customers by, and then create marketing strategies targeting the high-score users to ensure their retention. 

 

Is anyone out there doing something similar? What techniques or methods are you using to find the high-value customers in your Magento data set? Very curious to hear what any of you marketers are up to. 

 

Sal Calvo, Senior Analyst - Magento Analytics (http://www.rjmetrics.com)

 

Sal Calvo
Senior Analyst, Magento Analytics
www.rjmetrics.com
2 REPLIES 2

Re: Recency, Frequency, Monetary (RFM) analysis -- who is familiar?

Hi there,

 

We use RFM semgentation in magento. We export customers and their orders. Using Excel we segment them to 9 segments. Assign to every customer segment in magento and adjust e-mail scenario for every segment.

RFM helped us in LTV increasing.

 

Kind wishes,

Andrey Shmyrin

Antigravity LLC

angravity.ru

Re: Recency, Frequency, Monetary (RFM) analysis -- who is familiar?

Hi Andrey, that's really interesting -- can you shed some light on (1) what business rules you're using to categorize customers into 9 different segments, and (2) what tools you're using to perform that analysis?

 

Our Magento BI team has a couple of in-house approaches that we've worked with our clients on, and which might be of interest to you. We're also always curious about how other merchants and firms are approaching RFM analyses in new ways as well.

 

Looking forward to your response!

Sal Calvo
Senior Analyst, Magento Analytics
www.rjmetrics.com