How to Calculate RFM
Segment your customers based on purchase patterns.
The RFM Calculation Helper is a simple yet powerful Helper to give you an idea of which customers are of the lowest and highest values in your business based on recency, frequency, and monetary value. This segmentation helps you find commonalities and differences between customer purchase patterns.
This creates your RFM composite score with Recency (how recently did the customer make a purchase?), Frequency (How often do have they purchased?), and Monetary (How much did they spend in their purchases?) values, giving you better insight into your business.
- Build RFM Segmentation Matrix
- Update Contacts from with Purchase Data
- Create RFM Composite Score
- Trigger API goals based on RFM Value
RFM Segmentation Matrix
Build custom thresholds with an associated 1-5 rating scale for recency, frequency and monetary score. This creates a 5x5x5 matrix that you can use to further segment your list.
Update Contacts with Purchase Data
RFM Calculation involves pulling invoice data for the contact, and then running that data through calculations. During this time, we will have various data points that we allow you to save back to the contact record, to use further within your automation and reporting.
Create RFM Composite Score
After configuring your RFM Segmentation Matrix, you have just created a composite score which is the total combined representation of each of the three segmentations. R + F + M = composite score.
API Goals based on RFM Calculation Value
Trigger API Goals based on achieving each segmentation point within the RFM Matrix. For example, you could trigger when a Frequency Score of 5 is achieved.
- Copy API Goal Names - This goal icon is used to copy the API Goal names. We do this as a convenience so that you don't make any typos when entering them into your campaigns.
- Configure Button - The last button on the far right is the start configuration button which allows you to View, Edit, Copy, Delete, view the Usage Report and the Usage Log.
If you need more help reach out on the help desk at email@example.com.