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RFM Customer Segmentation
RFM Customer Segmentation
CUSTOMER SEGMENTATION
HELLO!
Kamil Bartocha
Follow me at @WhiteRavenPL
or drop me an email:
kamil.bartocha@marketingdistillery.com
WHAT IS RFM?
RFM Metrics:
e.g. time since last e.g. the total e.g. the total
activity number of recorded transaction value
transactions
RFM METRICS
TOTALS AVERAGES
●
R: Time since last transaction ●
R: Time since last transaction
●
F: Total number of transactions ●
F: Average time between
●
M: Total transactions value transactions
●
M: Average transaction value
0 20 40 60 80 90 100
days
0 1 2 3 4 5 6 orders
R: Segment 1
R F: Segment 2
M: Segment 2
F M
It is difficult to visualize!
STACKED TABLES
M
R F 1 2 3 4
1
2
1
3
compute summary 4
1
statistics 2
3
3
4
RECENCY SEGMENTATION
M
R F 1 2 3 4
Use the Recency
1
segmentation to identify 2
ACTIVE 1
customers at risk of 3
churn. 4
1
2
This works especially AT RISK 2
3
well if you use Survival 4
Analysis for Recency 1
2
segmentation. CHURNED 3
3
4
RECENCY SEGMENTATION
M
Also, use Recency for campaigning R F 1 2 3 4
1
2
X/UP-SELL, PROMOTIONAL ACTIVE 1
3
4
1
2
RETENTION CAMPAIGN AT RISK 2
3
4
1
2
REACTIVATION CAMPAIGN CHURNED 3
3
4
VALUE SEGMENTATION
1 Transaction
0 Transactions 1 Transaction
1 Transaction
12 months
RFM VERIFICATION
F M
F M
● Freepik, http://www.flaticon.com/authors/freepik