Recency, Frequency, Monetary Model

The Recency, Frequency, Monetary (RFM) model is a way businesses analyze customer behavior to improve marketing. It looks at three things: how recently a customer made a purchase (Recency), how often they buy (Frequency), and how much money they've spent overall (Monetary). Customers who purchased recently, buy often, and spend a lot are valued more. This helps businesses identify loyal customers, target promotions, and personalize experiences to boost engagement and sales efficiently. RFM is a strategic tool for understanding customer worth based on their shopping habits.