RFM Analysis - What is it, Tips and Examples

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In marketing, there are different methods for assessing the effectiveness of customer relationships, and one of them is RFM analysis. This tool allows businesses to assess customer behavior in terms of three key factors: frequency of purchases, amount spent, and time of the last purchase. In this article, we will examine in detail what RFM analysis is, how it works, where and why it should be used, and what benefits it gives to companies.
Introduction
RFM analysis is a customer segmentation method that estonia whatsapp number data helps determine their value to the company based on three indicators: Recency (recency of the last purchase), Frequency (frequency of purchases) and Monetary (cost of purchases). This method is used to assess customer loyalty and allows you to identify groups with a high probability of repeat purchases.

Why is RFM analysis important? Companies are faced with the need to identify more profitable customers, make their marketing efforts more effective, and improve their targeting. Without data on which customers are more active and which are less active, it is difficult to make informed decisions about how to allocate marketing resources. RFM analysis solves this problem by giving businesses a tool to evaluate and improve their customer engagement strategy.
Basic aspects of RFM analysis
RFM analysis is based on three indicators, which make up its name: