RFM Scoring

What is RFM Scoring?

Recency, frequency, and monetary value (RFM) is a tested way to see who may respond to new offers. Each customer is placed into deciles on each of these dimensions. For example, the top 10% of customers based on their most recent transaction date is placed in recency decile 1, the next 10% of customers based on their most recent transaction date is placed in recency decile 2, and so forth. The 10% whose most recent transaction is the oldest are placed in recency decile 10. This process is repeated for frequency and monetary value.

Recency

You receive graphs showing the average and ranges of each decile on each dimension. For example, this graph shows the distribution of recency deciles.

Recency Example Graph

Frequency

This example shows a frequency analysis. Because it is for a high-priced durable equipment industry using published data, there are only three frequency deciles. Most companies will have ten frequency deciles.

Frequency Example Graph

Monetary Value

Monetary Value Example Graph

Overall RFM

We also score people based on their overall score based on all three dimensions. These scores are added to the customer file we return to you. You can direct your marketing as appropriate to each customer based on their RFM score.

Total Customer Analytics

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