RFM Analysis: Increasing Advertising Efficiency with Correct Segmentation
Posted: Thu Jan 30, 2025 10:48 am
Segmentation of target groups is necessary to develop an effective strategy without increasing the advertising budget. RFM analysis will help you find an individual approach to each client - it simplifies the selection of key users by the number and cost of transactions. Let's understand RFM analysis and tell you how to conduct it yourself.
What is RFM analysis?
RFM is a sales analysis method that identifies key customers based on their activity and the profit they bring to the business. Using the RFM report, you can divide customers into groups and build an individual strategy for working with each segment.
The abbreviation RFM reflects the operating principle of the method:
Recency — the time since the last transaction. The amount of time bulgaria consumer email list that has passed since the last transaction.
Frequency — frequency of purchases. Frequency of repeat orders over a certain period.
Monetary — total transaction check. The amount of profit the client has brought in over the entire period.
Consumer segmentation using the RFM method is aimed at identifying regular, periodic and quitting customers. In this case, each group is assigned its own strategy - to retain the first, stimulate the second and return the third. In addition, using analysis and look-alike technology, you can find a new audience that is similar in characteristics to the key RFM segment. As a result, you will be able to increase the amount of profit with minimal marketing costs.
What is RFM analysis?
RFM is a sales analysis method that identifies key customers based on their activity and the profit they bring to the business. Using the RFM report, you can divide customers into groups and build an individual strategy for working with each segment.
The abbreviation RFM reflects the operating principle of the method:
Recency — the time since the last transaction. The amount of time bulgaria consumer email list that has passed since the last transaction.
Frequency — frequency of purchases. Frequency of repeat orders over a certain period.
Monetary — total transaction check. The amount of profit the client has brought in over the entire period.
Consumer segmentation using the RFM method is aimed at identifying regular, periodic and quitting customers. In this case, each group is assigned its own strategy - to retain the first, stimulate the second and return the third. In addition, using analysis and look-alike technology, you can find a new audience that is similar in characteristics to the key RFM segment. As a result, you will be able to increase the amount of profit with minimal marketing costs.