RFM Segmentation (Recency, Frequency, Monetary)

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.