RFM is a way of grouping your customers based on how they order, so you can send campaigns that are more relevant to them. RFM stands for recency, frequency and monetary value. Each customer is given a score from 0 to 10 for each of these, and you can use these scores when building segments to target exactly the customers you want to reach.
RFM is still being developed and refined. We’ll continue tuning the scoring over the coming months to improve its accuracy and make customer targeting increasingly useful.
Segmentation scoring
Recency
Recency looks at how recently a customer last placed an order. Customers who have ordered recently are generally more engaged and more likely to respond to your campaigns. The more recently a customer has ordered, the higher their score.
|
Score |
Criteria |
|---|---|
|
0 |
No orders in the last year |
|
1 |
Last order within the last 365 days |
|
2 |
Last order within the last 330 days |
|
3 |
Last order within the last 293 days |
|
4 |
Last order within the last 256 days |
|
5 |
Last order within the last 220 days |
|
6 |
Last order within the last 183 days |
|
7 |
Last order within the last 146 days |
|
8 |
Last order within the last 110 days |
|
9 |
Last order within the last 73 days |
|
10 |
Last order within the last 36 days |
Frequency
Frequency looks at how many orders a customer has placed in the last 6 months. This helps you tell the difference between your regular customers and those who only order occasionally.
|
Score |
Criteria |
|---|---|
|
0 |
No orders in the last 6 months |
|
1 |
1 to 3 orders in the last 6 months |
|
2 |
4 to 6 orders in the last 6 months |
|
3 |
7 to 9 orders in the last 6 months |
|
4 |
10 to 13 orders in the last 6 months |
|
5 |
14 to 16 orders in the last 6 months |
|
6 |
17 to 19 orders in the last 6 months |
|
7 |
20 to 22 orders in the last 6 months |
|
8 |
23 to 25 orders in the last 6 months |
|
9 |
26 to 29 orders in the last 6 months |
|
10 |
30 or more orders in the last 6 months |
Monetary value
Monetary value looks at how much a customer spends compared with your other customers. This helps you identify your highest-value customers.
|
Score |
Criteria |
|---|---|
|
0 |
Bottom 5% of spenders, or no orders in the last 2 years |
|
1 |
85% to 95% of spenders |
|
2 |
75% to 85% of spenders |
|
3 |
65% to 75% of spenders |
|
4 |
55% to 65% of spenders |
|
5 |
45% to 55% of spenders |
|
6 |
35% to 45% of spenders |
|
7 |
25% to 35% of spenders |
|
8 |
15% to 25% of spenders |
|
9 |
5% to 15% of spenders |
|
10 |
Top 5% of spenders |
Combining scores to build segments
Each score tells you something useful on its own, but the real value of RFM comes from using the three scores together. Here are a few examples of segments you could build.
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Loyal customers. Customers who have ordered recently, order regularly and spend well. These are some of your most engaged customers and are a good audience for rewards, exclusive offers or early access to promotions.
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Recency: 9 or above
-
Frequency: 7 or above
-
Monetary: 8 or above
-
-
High spenders at risk. Customers who have historically spent well but haven't ordered recently. A targeted offer or reminder can help encourage them to return.
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Recency: 5 or below
-
Monetary: 6 or above
-
-
New or occasional customers. Customers who have ordered recently but don't yet order regularly. A follow-up offer can help encourage another order and build repeat custom.
-
Recency: 9 or above
-
Frequency: 1
-
-
Lapsed customers. Customers who haven't ordered in over a year. These customers may need a stronger reason to return and are worth targeting separately from more recently active customers.
-
Recency: 0
-
RFM is a great starting point whenever you're creating a new segment. Try starting with one of the examples above and adjusting the scores until the segment matches the customers you want to reach.