RFM analysis

An RFM (Recency, Frequency and Monetary value) analysis provides us with precise, up-to-date segmentation of all our contacts according to their purchasing behavior over time. As well as being used immediately to target contacts with the appropriate campaign, this segmentation also allows us to make predictions that lead to optimized results (better conversions, reduced costs and better return on investment).

  

The RFM calculation will be based on data from the past two years

 

1. Properties

1.1. General

RFM analysis is based on three concepts:

  • Recency measures the time since the last purchase.
  • Frequency measures the total number of purchases.
  • Monetary Value measures the average purchase amount.

Each RFM parameter is assigned a whole value from 1 to 5, 5 being the highest.

 

1.2. Contact fields

The RFM analysis makes use of four new contact fields to save the information relating to each user in their profile. Their characteristics are as follows:

  • RFM fields are system fields that are created when you integrate Connectif, they can’t be edited
  • All RFM fields are radio type so can only have one of a predefined set of values.
  • Connectif automatically calculates the RFM fields once a day.

An_lisis_RFM_10.png

 

1.3. RFM segments

To make RFM analysis easier, Connectif groups the 125 possible combinations of points into 11 simple, manageable segments according to the purchase behavior they describe.

Connectif automatically makes the following RFM groupings:

 

RFM segment Behavior Recommended strategies RFM values
Champions Purchased recently, purchases often, big spender Reward them. They could promote your brand. Early adopters 555, 554, 544, 545, 454, 455, 445
Loyal customers Purchases often. Responds to promotions. Offer them higher-value products. Ask them to write reviews. Interact with them 543, 444, 435, 355, 354, 345, 344, 335
Potential loyalists Recent customer but their spend is relevant and they have purchased more than once. Use loyalty and retention strategies and recommend other products to them. 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 Has purchased very recently but doesn’t do so often. Encourage them to get involved, help them achieve their objective and start building a relationship 512, 511, 422, 421 412, 411, 311
Promising Recent shoppers but have not spent much yet. Help them get to know the brand, offer them vouchers or freebies. Retain them until they come back. 525, 524, 523, 522, 521, 515, 514, 513, 425, 424, 413, 414, 415, 315, 314, 313
Need attention Above average when it comes to Recency, Frequency and Monetary Value. However, they haven’t made a purchase for a while. Make them a temporary or limited offer. Recommend products to them based on their previous purchases. Reactivate them. 535, 534, 443, 434, 343, 334, 325, 324
Can't lose them Lower than average when it comes to Recency, Frequency and Monetary Value. If you don’t reactivate them, you’ll lose them. Share some valuable content with them. Recommend popular products or those with a discount. Contact them again. 331, 321, 312, 221, 213, 231, 241, 251
About to sleep They’ve spent a lot and frequently but their last purchase was a long time ago. Bring them back! Send them a personalized email to restart your relationship, offer them renewals and content they’ll find useful. 255, 254, 245, 244, 253, 252, 243, 242, 235, 234, 225, 224, 153, 152, 145, 143, 142, 135, 134, 133, 125, 124
At risk Used to make the biggest purchases but haven’t returned for a while. Get them back with renewals and updates.  Talk to them, don’t let your competitors turn their heads. 155, 154, 144, 214, 215, 115, 114, 113
Hibernating Their last purchase was a long time ago. They didn’t spend much and placed few orders. Offer them relevant products and special discounts. Create brand value. 332, 322, 233, 232, 223, 222, 132, 123, 122, 212, 211
Lost The lowest Recency, Frequency and Monetary Value scores. Revive their interest using large-scale campaigns. Ignore them in the rest of your strategies
111, 112, 121, 131, 141, 151

 

2. How they´re used in Connectif

2.1. Checking RFM fields

1. Go to “Contacts > Contact fields” and find the field you want to check. If necessary, filter the fields or search using the term “RFM”.

2. Click  view.

An_lisis_RFM_11.png

3. Click  Cancel to exist the detailed view of the contact field.

 

2.2. Checking RFM results on contact sheets

1. Access “Contacts > Segments” and search or filter to find the contact you want to check.

2. Once you’ve found it, click  (Details) to access the contact’s profile..

3. Check the values assigned to the contact in the corresponding RFM analysis and segment.

  

RFM values cannot be modified. Connectif calculates them automatically based on each contact’s shopping behavior.

An_lisis_RFM_1.png

 

2.3. Dinamic segmentation of contacts by using RFM parameters

1. Go to "Contacts > Segments" and click  Create new segment.

2. For Type, select Dynamic.

3. Click  Go to segment editor.

4. For Name, choose a title to identify your segment.

5. (Optional) For Description, add an additional explanation for your group of contacts.

6. In the shaded area below, establish the conditions by which Connectif should determine the contacts that belong (or not) to the group.

 

In our example, in the first drop-down menu “RFM - Segment” has been selected for evaluation. “Champions” has been selected as a validation value of the condition in the second drop-down.

7. (Optional) Click  Add another condition if further segmentation criteria are required.

  

You can add as many filters as you like. Remember that the contact must meet all of these to be included in the segment.

8. Click  Save to create the segment.

An_lisis_RFM_2.png

 

2.4. Exporting contacts according to their RFM

1. Go to “Contacts > See all” and click  Export.

2. Drag the “Contacts” block to the right-hand box or click  (Add) to export the contacts’ data fields. Click Next  .

3. In Select data source, click  Add another condition to filter the contacts to export according to their RFM parameters or segmentation.

An_lisis_RFM_3.png

4. Click Next  .

5. Configure the next two steps, Select contact fields and Exit format, according to your objective and preferences.

6. Click Start export  .

 

2.5. Exporting Contacts´ RFM data

1. Go to “Contacts > See all” and click Export  .

2. Drag the “Contacts” block to the right-hand box or click  (Add) to export the contacts’ data fields. Click Next  .

3. (Optional) In Select data source, filter the contacts to export.

4. Click Next  .

5. In Select contact fields, check all those you want to export together with the contacts’ RFM data. Click Next  .

An_lisis_RFM_4.png

6. Configure the Exit format according to your preferences.

7. Click Start export  .

 

2.6. Workflows

"Start" node

1. Click  (Edit node configuration) of the “Start” node.

2. Under Select Limitation, check “In segment” and, in the drop-down menu, choose one of the RFM segments created automatically by Connectif to filter the audience for this strategy.

An_lisis_RFM_5.png

3. Click  Update.

 

"Check Attribute" node

1. Click  (Edit node settings) of the “Check Attribute” node.

2. In Configuration, use the contacts’ RFM fields to check the data gathered by previous nodes.

An_lisis_RFM_7.png

3. Click   Update.

 

"Check Workflow value" node

1. Click  (Edit node settings) for the “Check Workflow value” node.

2.  In Configuration, use the contacts’ RFM fields to check the data gathered by previous nodes.

An_lisis_RFM_8.png

3. Click   Update.

 

"Set Attribute" node

1. Click  (Edit node settings) for the “Set Attribute” node.

2. In Configuration, use the values of the contact’s RFM field to modify or assign them to other contact fields.

An_lisis_RFM_9.png

3. Click   Update.

 

 

 Congratulations!
You’ve reached the end of the tutorial.

  

Do you have questions?
Don’t forget, our Connectif specialists are here to help you. To contact them, just open a Support ticket by clicking the blue “Help” button on your dashboard.

 


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