RFM Analysis for Customer Segmentation

RFM Analysis for Customer Segmentation

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  RFM Analysis How toUse RFM for Customer Segmentation
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  What is RFM Analysis? RFM(Recency, Frequency, and Monetary value) Analysis measures how recently, how often, and how much money a customer has given your brand. E.g. Time since last order or last engaged with the product RECENCY The freshness of the customer activity, be it purchases or visits FREQUENCY The frequency of the customer transactions or visits E.g. Total number of transactions or average time between transactions/ engaged visits MONETARY The intention of customer to spend or purchasing power of customer E.g. Total or average transactions value RFM Metrics
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  How Does RFM Help? RFManalysis helps marketers answer: • Who are their best customers? • Which of their customers could contribute to churn rate? • Who has the potential to become valuable customers?
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  CleverTap’s RFM Analysis Dashboard Ourdashboard uses recency and frequency scores to visualize RFM on a 2-dimensional graph. And we pared down the number of possible segments to arrive at just 10. Can’t Lose Them 2 (5.41%) At Risk 3 (5.41%) Need Attention 3 (5.41%) Hibernating 6 (16.22%) About To Sleep 6 (16.22%) Loyal Customers 2 (5.41%) Champions 3 (5.41%) Potential Loyalists 3 (5.41%) Promising 3 (5.41%) New Customers 3 (5.41%) Recency and Frequency Grid 1 2 3 Recency Score 4 5 1 2 3 4 5 FrequencyScore
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  Champions Champions are yourbest customers, who bought most recently, most often, and are heavy spenders.Reward these customers. They can become early adopters for new products and will promote your brand. BUY NOW WELCOME BACK! 12
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  Potential Loyalists Potential Loyalistsare your recent customers with average frequency and who spend a good amount. Upsell them with memberships, loyalty programs, or recommend related products to help them become your Champions. RATE THIS APP How was your shopping experience? 2
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  New Customers New Customershave a high overall RFM score but are not frequent shoppers. Start building relationships with these customers by providing onboarding support (and a fantastic first-time user experience) plus special offers to increase their visits. SIGN UP Already have an account? Sign in
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  At-Risk Customers At RiskCustomers are your customers who purchased often and spent big amounts, but haven’t purchased recently. Send them personalized reactivation campaigns to reconnect. Offer renewals and helpful products to encourage another purchase. SEND REPORT SORRY :( Some unexpected error occured REMIND ME LATER
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  Can’t Lose Them Can’tLose Them are customers who used to visit and purchase quite often, but haven’t been visiting recently. Bring them back with relevant promotions, win-back campaigns, and surveys to find out what went wrong and avoid losing them to a competitor. RETURN TO CART WE MISS YOU :( Looks like you left this gorgeous dress in your shopping cart
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  Read More AboutRFM https://clevertap.com/blog/rfm-analysis/ THE INTELLIGENT MOBILE MARKETING PLATFORM www.clevertap.com