E-commerce Glossary
RFM Segmentation (Recency, Frequency, Monetary)
Customer classification based on purchasing behavior.
The RFM model scores each customer on three criteria: Recency (date of last purchase), Frequency (number of purchases), and Monetary value (total spend). Each criterion receives a score from 1 to 5. A 555 customer is your best brand ambassador; a 111 customer is lost. RFM segmentation enables personalized marketing actions: reactivate dormant customers, reward loyal ones, maximize your best customers.
Related terms
AOV (Average Order Value)Average amount spent per order in your store.See definition ARPU (Average Revenue Per User)Average revenue generated per user over a given period.See definition Blended CACAverage acquisition cost including all marketing channels.See definition Blended ROASOverall return on all advertising spend combined.See definition CAC (Customer Acquisition Cost)Total cost to acquire a new customer.See definition Churn RatePercentage of customers lost over a given period.See definition
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