Brand Application Examples to Help You Accurately Focus on Your Audience!

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We can divide customers into groups according to the "high" and "low" of R, F, and M respectively. By placing these three key indicators on the X, Y, and Z axes, customers can be visually divided into eight quadrants, forming the following most common RFM model diagram:


Image source: Qibao.com
The above are the 8 types of customers classified by applying the RFM model. It is not difficult to understand that each of the 3 indicators has 2 categories, resulting in 8 combinations. However, although such analysis is detailed, it is a bit complicated and difficult to understand, and is not conducive to solution planning. This article suggests that iran whatsapp phone number when applying RFM segmentation, you should first return to the essence of R, F, and M, and think about the significance of these three indicators in improving customer value.

RFM and LTV have the same purpose: improving customer lifetime value should also start from these three levels
We are at ＜LTV Customer Lifetime Value Algorithm and Case Study: Breaking down the complex formula to keep up with marketing trends!＞As analyzed in an article, if the LTV calculation formula is disassembled, it can be found that as long as the three indicators of customers' "purchase frequency", "customer unit price" and "customer longevity" are improved, in other words - as long as customers consume more often, Spend more money per purchase and continue to spend for a longer period of time , and your LTV will naturally increase.


The "purchase frequency", "customer unit price" and "customer longevity" in the above LTV formula are highly consistent and similar to RFM. "Purchase frequency" corresponds to Frequency ; "customer unit price" corresponds to Monetary ; and Recency (time of last consumption) can be used as one of the important indicators for predicting "customer lifespan".