RFM is a tool to understand different customer segments and create targeted campaigns across channels. For more information about the RFM model, visit this article: What is RFM?
Navigate to Apps > RFM. This is a premium app for which you need an additional license. At the top of the page you will find:
Overview
In the app, you will find segments based on RFM scores that help you identify interesting segments within your customer base. Use these segments to understand your audience better and to setup highly targeted campaigns.
Below example of the ‘Potential Loyalist’ segment. These customers have recently purchased and also shown that they are buying more than the average customer.Their value is still somewhat behind on your champion customers though. A great opportunity to engage with them and drive up their value.
The ‘About to Sleep’ segment has customers that made frequent purchases, but haven’t been to your business recently. What’s going on here? A golden opportunity to get them back shopping.
There are many more things to consider. Maybe setup an activation email campaign for customers that have not purchased for a while to keep them engaged? Or make sure your high value champions are always first in line when they contact customer support. Have a look at the full list of RFM segments and their characteristics below. We have defined the Segments with the following RFM values, to give you a good head start.
- Champions - Super recent - Super frequent - Very high value (555, 554, 544, 545, 454, 455, 445)
- Loyal - Very recent - Very frequent - High value (543, 444, 435, 355, 354, 345, 344, 335)
- Potential loyalist - Very recent - Very frequent - Medium value (553, 551, 552, 541, 542, 533, 532, 531, 452, 451, 442, 441, 431, 453, 433, 432, 423, 353, 352, 351, 342, 341, 333, 323)
- New customers - Very recent - Not frequent - Low value (512, 511, 422, 421 412, 411, 311)
- Promising - Very recent - Not frequent - High value (525, 524, 523, 522, 521, 515, 514, 513, 425,424, 413,414,415, 315, 314, 313)
- Need attention - Very recent - Frequent - High value (535, 534, 443, 434, 343, 334, 325, 324)
- About to sleep - Hardly recent -Frequent - Low value (535, 534, 443, 434, 343, 334, 325, 324)
- At risk - Hardly recent - Very frequent - High value (255, 254, 245, 244, 253, 252, 243, 242, 235, 234, 225, 224, 153, 152, 145, 143, 142, 135, 134, 133, 125, 124)
- About to lose - Not recent - Hardly frequent - High value (155, 154, 144, 214,215,115, 114, 113)
- Hibernating - Hardly recent - Hardly frequent - Medium value (332, 322, 233, 232, 223, 222, 132, 123, 122, 212, 211)
- Lost customers - Not recent - Frequent - Low value (111, 112, 121, 131,141,151)
In case you want to define your own values for each segment (let’s say you’d only want 555 to be your champions) you can easily do so by clicking on the “edit values” button of a segment:
CLTV (Customer Lifetime Value)
To understand more about the value of your customers individually, check out the Customer Lifetime Value tab. This will tell you more about behaviour of customers in each segment. You will learn, their customer value, amount of purchases, average order value and customer lifespan.
This information gives great insight and cues on how to move customers to a higher value segment. Maybe you need to focus on bringing up the order value for your Potential loyalists, but need to focus on the amount of purchases for those about to sleep. Check back regularly and you will quickly realize what’s working and what still needs to be done for different segments.
Momentum
Through the Momentum score, a profile's past 7 days of activity is compared with the same profile's average 7 days of activity. Momentum scores range from 0 to 100. The higher the score, the more contact a profile had with your site in the past 7 days.
The Momentum Score is 50 when the last 7 days' activity of a profile is the same as the average. If there is more activity than the average, the value will be higher, with a maximum of 100. If there is less activity than average, the value is lower, with a minimum of 0.
There are several formulas to calculate the Momentum score, based on different scenario's.
| Scenario | Condition | Calculation |
|---|---|---|
| New Visitor | First visit date is less than 7 days ago | Momentum = 50 |
| Inactive visitors | Number of visits in last 7 days is 0 | Momentum = 0 |
| Decreased momentum | Number of visits per day since the first visit is greater than or equal to that of the last 7 days | Momentum = (Number of visits per day in the last 7 days / Number of visits per days since the first visit) * 50 |
| Increased momentum | Number of visits per day since the first visit is lower than that of the last 7 days | Momentum = 100 - (Number of visits per days since the first visit / Number of visits per day in the last 7 days) * 50 |
Use these segments to setup highly targeted campaigns. For example setup a special offers email campaign for profiles that have a sudden increase in momentum, since they might have a propensity to buy or engage. On the other hand, you can also activate profiles with low momentum scores with a re-engagement campaign.