Recency, Frequency, Monetary (RFM)

Recency, Frequency, and Monetary (RFM) are metrics used by businesses to understand customer buying behavior. Recency measures how recently a customer made a purchase, indicating their current engagement. Frequency tracks how often they buy, showing loyalty. Monetary reflects how much money they spend, revealing their value to the business. Together, these insights help companies identify their most engaged, valuable customers and tailor marketing strategies to improve retention and sales. RFM effectively segments customers based on their interaction patterns, enabling more targeted and efficient marketing efforts.