RFM Analysis - Marketing Strategy
| Technical name | setu_rfm_analysis |
| License | OPL-1 |
| Website | https://www.setuconsulting.com |
RFM analysis is a data driven customer behavior segmentation technique. RFM stands for recency, frequency, and monetary value. RFM is a method used for analyzing customer value. As you can gauge, RFM analysis is a handy method to find your best customers, understand their behavior and then run targeted email / marketing campaigns to increase sales, satisfaction and customer lifetime value.
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RFM
Recency : Date of Last of PurchaseFrequency : Total Number of OrdersMonetization : Total Order Value
RFM analysis increases eCommerce sales. It enables personalized marketing, increases engagement, and allows you to create specific, relevant offers to the right groups of customers. RFM analysis allows marketers to target specific clusters of customers with communications that are much more relevant for their particular behavior – and thus generate much higher rates of response, plus increased loyalty and customer lifetime value.
RFM Analysis, our solution helps you to run targeted email / marketing campaigns to increase sales, satisfaction and customer lifetime value. With our solution you can easily bifurcate your customers by RFM segments which gives you a clear idea about your marketing strategy.
Key Features
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Benefits of RFM Analysis
- Conducting an RFM analysis on your customer base and sending personalized campaigns to high value targets has massive benefits for your business.
Personalization: By creating effective customer segments, you can create relevant, personalized offers.
Improve Conversion Rates: Personalized offers will yield higher conversion rates because your customers are engaging with products they care about.
Improve unit economics
Increase revenue and profits
Identify target audience easily with the help of RFM Analysis
Easy to handle marketing campaigns for the target audience
Business health checkup can be easily done with the RFM segmentation ratio analysis
Measures growth easily by comparing RFM Segment Ratio Yearly Analysis
RFM Segments
Highly engaged customers who have bought the most recent, the most often, and generated the most revenue. Marketing Strategy : Focus on loyalty programs and new product introductions. These customers have proven to have a higher willingness to pay, so don't use discount pricing to generate incremental sales. Instead, focus on value added offers through product recommendations based on previous purchases.
Customers who buy the most often from your store.Marketing Strategy : Loyalty programs are effective for these repeat visitors. Advocacy programs and reviews are also common X1X strategies. Lastly, consider rewarding these customers with Free Shipping or other like benefits.
Customers who have generated the most revenue for your store.Marketing Strategy : These customers have demonstrated a high willingness to pay. Consider premium offers, subscription tiers, luxury products, or value add cross/up-sells to increase AOV. Don't waste margin on discounts.
Customers who return often, but do not spend a lot.Marketing Strategy : You've already succeeded in creating loyalty. Focus on increasing monetization through product recommendations based on past purchases and incentives tied to spending thresholds (pegged to your store AOV).
Customers who are above average recency, frequency and monetary values. May not have bought very recently though.Marketing Strategy : Make limited time offers, Recommend based on past purchases. Reactivate them.
These are customers who transacted only once or very rare, but very recentlyMarketing Strategy : Most customers never graduate too loyal. Having clear strategies in place for first time buyers such as trigger welcome email will pay dividends.
Great past customers who haven't bought in awhile. Marketing Strategy : Customers leave for a variety of reasons. Depending on your situation price deals, new product launches, or other retention strategies.
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NOTE
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