The RFM matrix helps you turn customer data into effective actions
How do you tell the most relevant customers apart from the crowd, and how should you be communicating with them?
Knowing your customers - Retail’s greatest challenge
It’s rare for retailers to have visibility over who their best customers are, when they have been active, and the revenue they bring in.
Then there’s the question of which new customers you can guide towards becoming loyal devotees, returning time and again. And what about those historical VIPs who haven’t been active recently? Did we do something wrong?
Everyone knows that these groups are different, and you need to attend to them differently – but in the retail setting, there hasn’t been a tool to do it quickly through a simple, highly visual interface.
Download our free whitepaper and see how you can win big with the Recency, Frequency, Monetary Value (RFM) analysis.
Custobar’s inbuilt RFM matrix allows you to identify your new, VIP, passive, and “lost” customers based on when they have been active and how often they have purchased.
You can quickly launch campaigns to reach these different groups. You can also identify and compare these groups and immediately see where most of the revenue comes.
Sometimes a surprisingly small number of customers can be responsible for the majority of your income, and those should be taken care of best. Now knowing exactly who they are – and keeping them happy – is a breeze.
It's not just about the numbers. The RFM matrix is an extremely effective way to take rapid action based on your customer data.
What can you achieve with the RFM matrix?
- Re-activate your passive customers before you lose them by sending targeted messages or even discounts. Even a simple request for feedback can be enough to bring a customer back.
- Ensure that recently joined customers make second purchase. Rinse and repeat until you have your next VIP customer.
- Encourage that first buy for customers who haven’t purchased anything yet, but have been browsing a particular category. With Custobar, this is a one-click operation.
RFM matrix benefits
- Identify new, VIP, passive and “At risk” customers in an instant - You can see all customers in a matrix with no overlaps
- Look at all customers at once, or on the level of selected target audiences (demographics, customer persona groups, loyalty program levels)
- Follow the money! See how large a share of revenue a specific group represents.
- Launch activities directly from the RFM matrix for any of these groups. Quick action – quick follow-up.
What does RFM stand for?
- Recency: The freshness of the relationship between your brand and your customer; when your customer last bought a product from you (online or offline).
- Frequency: The measure of demand; how many times your customers have purchased from you.
- Monetary value: View the monetary value or the proportional value of every selected group of customers compared to the rest.
Learn how to master the enormous potential of RFM analysis, download our free RFM whitepaper.