Our new RFM app in Spotler Activate is live. The Spotler Activate Premium feature offers a great tool to understand different customer segments and create targeted campaigns across channels.

RFM scores are based on the RecencyFrequency and Monetary value of your customers purchase(s). Each customer will get a score ranging from 1 (lowest) to 5 highest) for all three values. The score is determined by an analysis of all purchases that occurred in the past twelve months and splitting them into 5 equal groups.

For example: a customer with a Monetary value score of 5 will belong to the top 20%of customers based on monetary value. When the same customer would have a Recency score of 1, this means that they are in the bottom 20% of customers based on recency of their purchase. The Frequency score determines if a customer makes purchases more frequently than other users. A score of 3 would indicate that the customer is in the middle cohort of users based on purchase frequency.

Analyse segments

In the app, you will find segments based on RFM scores that help you identify interesting segments within your customer base. Use these segments to understand your audience better and to setup highly targeted campaigns.

Below example of the ‘Potential Loyalist’ segment. These customers have recently purchased and also shown that they are buying more than the average customer. Their value is still somewhat behind on your champion customers though. A great opportunity to engage with them and drive up their value.

The ‘About to Sleep’ segment has customers that made frequent purchases but haven’t been to your business recently. What’s going on here? A golden opportunity to get them back shopping.

There are many more things to consider. Maybe setup an activation email campaign for customers that have not purchased for a while to keep them engaged? Or make sure your high value champions are always first in line when they contact customer support. Have a look at the full list of RFM segments and their characteristics below.

  • Champions – Super recent – Super frequent – Very high value
  • Loyal – Very recent – Very frequent – High value
  • Potential loyalist – Very recent – Very frequent – Medium value
  • New customers – Very recent – Not frequent – Low value
  • Promising – Very recent – Not frequent – High value
  • Need attention – Very recent – Frequent – High value
  • About to sleep – Hardly recent -Frequent – Low value
  • At risk – Hardly recent – Very frequent – High value
  • About to lose – Not recent – Hardly frequent – High value
  • Hibernating – Hardly recent – Hardly frequent – Medium value
  • Lost customers – Not recent – Frequent – Low value

Create audiences

Let’s have a look at how to use these segments in Spotler Activate. On each segment tile, there is an option to either edit the values for your segment, and to create an audience. These audiences can be used like any other audience and are available for advertising, journey builder and website personalization.

Customer Lifetime Value

To understand more about the value of your customers individually, check out the Customer Lifetime Value tab. This will tell you more about behaviour of customers in each segment. You will learn, their customer value, number of purchases, average order value and customer lifespan.

This information gives great insight and cues on how to move customers to a higher value segment. Maybe you need to focus on bringing up the order value for your Potential loyalists but need to focus on the number of purchases for those about to sleep. Check back regularly and you will quickly realize what’s working and what still needs to be done for different segments.

Experience RFM for your business

Our RFM app is available in the Premium add-on of our CDP. Reach out to us if you want to use it to improve your results.