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Magnetic Keys
Lifecycle & CRM

RFM segmentation

Also known as: recency frequency monetary

Definition

RFM segmentation groups customers by how recently they purchased, how often they purchase, and how much they spend — producing behavioural segments that predict response better than demographics.

Its strength is that it uses only transactional data every business already has, and it maps directly to action: recent frequent high-spenders get retention and advocacy programmes, lapsing high-value customers get win-back, and low-value one-time buyers get automation rather than attention.

It is most powerful when combined with a churn or next-purchase prediction, so intervention happens before a valuable customer lapses rather than after.

Put it to work

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