RFM analysis
RFM analysis (recency, frequency, monetary)
Retention
RFM analysis is a way to score customers by recency, frequency and monetary value of their purchases to find your best and most at-risk buyers.
What is RFM analysis?
RFM ranks each customer on three questions: how recently they bought, how often they buy and how much they spend. Each gets a score (often 1 to 5), and combinations name groups like Champions (high on all three) or At risk (used to buy often, not lately).
Why it works: past buying behavior is a strong predictor of future buying.
SmartyTap doesn't calculate RFM scores. You can build similar segments from its conditions: last order date, number of orders and amount spent.
Example
A customer who ordered last week, has 8 orders and spent $900 scores 5-5-5; one who last ordered 14 months ago after 6 orders scores 1-4-4 and is "at risk."
Why RFM analysis Matters
It shows who to reward, who to win back and who not to discount.
RFM analysis FAQ
Does SmartyTap have RFM segments?
Not as scores. You can build segments on last order date, order count and amount spent, which cover the same ground.
How often should RFM scores update?
As often as your data does; daily or weekly is common.
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