Post by account_disabled on Sept 16, 2023 0:12:55 GMT -8
Frequency measures the number of customer purchases in a certain period of time, assessing the level of repeat customer interaction with the business.
When applying the RFM model, a customer is considered more valuable if they purchase more frequently. The number of purchases a customer makes in a specific period of time will determine their Frequency level. For example, a customer who purchases every month will have a higher frequency than a customer who only purchases once a year.
Frequency in the RFM model is used to classify customers into different groups such as:
Regular customers: Purchase with high frequency within a certain period of time. This is an important customer group and has the potential to bring in great revenue.
Recurring customers: Purchase with a stable frequency over a certain period of time, not too often. This is a customer group that can potentially grow and reach more frequently.
Random customers: Purchases do not have a regular pattern, no specific frequency. This is a group of customers that is quite difficult to predict and needs attention to increase interaction.
Infrequent customers: Purchase very few times or do not purchase for a Phone Number List long time. This is a customer group that is not a marketing priority, and may require special efforts to motivate them to increase their purchasing frequency.
Monetary (Monetary value per purchase)
Monetary measures the monetary or order value a customer spends on each purchase, representing the level of value the customer brings to the business. Depending on the data analysis needs of the business for each marketing campaign, the value of money is measured by the total amount of money customers have paid or the total order value of each transaction.
Monetary in RFM Segmentation is used to classify customers into different groups such as:
High-value customers: Spend a lot of money on each purchase, contributing greatly to business revenue. This is an important customer group and needs to be created with favorable conditions to maintain high spending levels.
Average value customers: Spend a moderate amount of money on each purchase. This is a customer group that has growth potential and can add value by increasing engagement and marketing.
Low-value customers: Spend little money on each purchase. This is a customer group that may not be very profitable for the business and may need to work to increase the value of each transaction.
RFM Customer Segmentation – RFM Segmentation
RFM Segmentation is the process of segmenting customers into groups based on three RFM factors (Recency, Frequency, Monetary) in the RFM model. It helps businesses better understand their customers and create appropriate marketing and customer relationship management strategies.
Champions (pioneer customer group): This is the best customer group, they have purchased most recently, purchased most often and spent the most money. Businesses should provide exclusive perks and take good care of this group of customers because they can become pioneers in using new products and help promote your brand to relatives and friends.
Potential Loyalists (group of potential loyal customers): This is a group of customers who have recently made an average purchase and have spent a fairly large amount of money. To retain and build relationships with this group of customers, businesses can offer membership programs, loyalty programs or recommend related products to upgrade them to Champions customers.
New Customers (new customer group): This is a group of customers with a high overall RFM score but do not buy frequently. Businesses can build relationships with these customers by providing support, advice, providing post-purchase policies and sending special offers to increase their visits.
When applying the RFM model, a customer is considered more valuable if they purchase more frequently. The number of purchases a customer makes in a specific period of time will determine their Frequency level. For example, a customer who purchases every month will have a higher frequency than a customer who only purchases once a year.
Frequency in the RFM model is used to classify customers into different groups such as:
Regular customers: Purchase with high frequency within a certain period of time. This is an important customer group and has the potential to bring in great revenue.
Recurring customers: Purchase with a stable frequency over a certain period of time, not too often. This is a customer group that can potentially grow and reach more frequently.
Random customers: Purchases do not have a regular pattern, no specific frequency. This is a group of customers that is quite difficult to predict and needs attention to increase interaction.
Infrequent customers: Purchase very few times or do not purchase for a Phone Number List long time. This is a customer group that is not a marketing priority, and may require special efforts to motivate them to increase their purchasing frequency.
Monetary (Monetary value per purchase)
Monetary measures the monetary or order value a customer spends on each purchase, representing the level of value the customer brings to the business. Depending on the data analysis needs of the business for each marketing campaign, the value of money is measured by the total amount of money customers have paid or the total order value of each transaction.
Monetary in RFM Segmentation is used to classify customers into different groups such as:
High-value customers: Spend a lot of money on each purchase, contributing greatly to business revenue. This is an important customer group and needs to be created with favorable conditions to maintain high spending levels.
Average value customers: Spend a moderate amount of money on each purchase. This is a customer group that has growth potential and can add value by increasing engagement and marketing.
Low-value customers: Spend little money on each purchase. This is a customer group that may not be very profitable for the business and may need to work to increase the value of each transaction.
RFM Customer Segmentation – RFM Segmentation
RFM Segmentation is the process of segmenting customers into groups based on three RFM factors (Recency, Frequency, Monetary) in the RFM model. It helps businesses better understand their customers and create appropriate marketing and customer relationship management strategies.
Champions (pioneer customer group): This is the best customer group, they have purchased most recently, purchased most often and spent the most money. Businesses should provide exclusive perks and take good care of this group of customers because they can become pioneers in using new products and help promote your brand to relatives and friends.
Potential Loyalists (group of potential loyal customers): This is a group of customers who have recently made an average purchase and have spent a fairly large amount of money. To retain and build relationships with this group of customers, businesses can offer membership programs, loyalty programs or recommend related products to upgrade them to Champions customers.
New Customers (new customer group): This is a group of customers with a high overall RFM score but do not buy frequently. Businesses can build relationships with these customers by providing support, advice, providing post-purchase policies and sending special offers to increase their visits.