RFM Analysis

RFM analysis is a marketing tool used to understand customer behavior through three key metrics: Recency, Frequency, and Monetary value. Recency measures how recently a customer made a purchase; Frequency tracks how often they buy; and Monetary value assesses how much money they spend. By analyzing these factors, businesses can identify their most valuable customers, tailor marketing strategies to enhance engagement, and drive sales. This helps companies retain customers and improve overall profitability by focusing on relationships that yield the best returns.