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

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Magento Team

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