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Resources
Transaction Data
RFM Table
RFM Score
Segments
Introduction
RFM (recency, frequency, monetary) analysis is a behavior based technique used to segment customers by examining their transaction history such as
- how recently a customer has purchased (recency)
- how often they purchase (frequency)
- how much the customer spends (monetary)
It is based on the marketing axiom that 80% of your business comes from 20% of your customers. RFM helps to identify customers who are more likely to respond to promotions by segmenting them into various categories.