Maximizing Customer Loyalty and Revenue with RFM Analysis

RFM Analysis is a marketing technique which assigns customers numerical scores based on their spending habits.

RFM analysis stands for Recency, Frequency and Monetary and a score is assigned based on each of these values to give an overall RFM Score.

The scores are then grouped into Segments (Champions, Loyal Customers, At Risk etc.) which can be used to identify which customers would most benefit from specific marketing campaigns. It is based on the idea that “80% of your business comes from 20% of your customers” and allows you to reward loyal customers or provide a more stable income from your customers who are spending less frequently. You can also target customers who you may be at risk of losing and a Cannot Lose group shows lost Champions who you can work on retaining.

So, you can identify customers you’re at risk of losing and focus a campaign on retaining them or even put out a special reward offer for your champion customers. This level of customer interaction has proved invaluable across a broad range of industry sectors. By knowing your customer base and their behaviours, you can keep more of your customers and have them spending with you more frequently.

Outserve’s custom reporting service, prepared by experienced data analysts, offers customisable RFM analysis based on your business model. It can give you the tools and information you need to make the most out of your customer base.

If you would like to know more, or are interested in seeing a demonstration then reach out today via email, or give us a call.