RFM Analysis: A Powerful Customer Segmentation Model
RFM analysis (Recency, Frequency, and Monetary value) is a proven method for understanding customer behaviour and optimising marketing efforts. By analysing how recently and often customers purchase — and how much they spend — you can tailor messaging, improve retention, and maximise revenue.
For B2B wholesalers and distributors, RFM analysis is a game-changer, helping businesses predict spending patterns and proactively engage customers before they churn. Learn more.
Grow your sales with RFM Analysis - the #1 strategy for B2B product sellers
What is RFM Analysis?
RFM analysis is a customer segmentation method that ranks customers based on Recency, Frequency, and Monetary value. It helps businesses identify high-value customers, predict future buying behaviour, and personalise marketing.
- Recency – How recently a customer made a purchase.
- Frequency – How often they buy.
- Monetary Value – How much they spend.
By focusing on actual purchasing behaviour, RFM analysis provides a data-driven way to improve retention, boost sales, and strengthen customer relationships.
Segment your customers
Recency, Frequency and Monetary Analysis transforms customer and sales data into valuable insights that simplify your customer segmentation strategy. By regularly calculating the buying patterns of your entire customer base using an automated system, RFM Analysis enables product sellers to evaluate customer behaviour across three areas; recency, frequency, and monetary value. Using these insights, you can deliver more focused communications and start driving growth.
Focus on the right customers
When your database is overcrowded with hundreds or even thousands of customers, RFM Analysis will automatically recalculate your data, from who is spending the most to who is slipping away, so you never lose sight of where to focus your efforts first. Maintaining real-time awareness of your customer data is the key to winning back lost customers and building stronger relationships with those slipping through the net, making RFM Analysis the ultimate tool to drive growth in B2B wholesale, distributor and manufacturing businesses.
Benefits of Automated RFM Analysis
- Track customer spending behaviour in real-time so you can take proactive measures for quick results with RFM online
- Win back your churning customers for continuous revenue growth
- Elevate your onboarding process so new customers quickly become regular buyers
- Identify opportunities for product promotion and upsell to increase average order value
- Maximise the lifetime value of your customers and ensure confidence in order repeatability
- Shorten the sales cycle by nurturing prospective customers into profitable opportunities
Power RFM Analysis with CRM Integration
Why crunch numbers manually when Prospect CRM can do it for you? By integrating with your back-office systems, the CRM automatically tracks Recency, Frequency, and Monetary trends using real-time order data. That means no more guesswork – just instant insights into your best customers, lapsed buyers, and big spenders.
How our RFM Analysis Software supports the growth of small businesses
Foundation for Growth
RFM segmentation provides a solid foundation for businesses to truly understand their customer base. Segmenting customers based on purchasing behaviour forms the basis for tailored marketing strategies and enhanced customer relationships.
Scalability
As businesses expand, RFM Analysis scales accordingly to accommodate growing datasets. Evolving customer data is imported seamlessly without the need for manual updates or new expertise, making RFM online simple.
ROI Maximisation
Online RFM analysis allows smaller business to allocate their resources more effectively by pinpointing the best opportunities for targeted marketing efforts, maximising return on investment.
Informed Decision-Making
RFM Analysis helps SMEs make smarter decisions. With data-driven insights, businesses are better equipped to have confidence in commitments that are validated by data rather than guesswork.
Competitive Advantage
Staying one step ahead of the competition is supported by RFM Analysis which helps businesses differentiate themselves in a crowded industry.
How to Calculate RFM Scores
RFM analysis score each customer on Recency, Frequency, and Monetary value, typically on a scale of 1 to 5 (with 5 being the highest).
Here’s how it works:
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RFM Analysis Software FAQs
What is RFM Analysis
Recency, Frequency, and Monetary value (RFM) analysis is a customer segmentation method used by organisations to identify and prioritise customers based on their buying behaviour for more targeted campaigns.
How can I use RFM Analysis in my business?
Use RFM Analysis to segment customers into cohorts, then develop tailored engagement strategies based on their purchasing behaviour. For example, you could look to re-engage at-risk customers to prevent churn with a win-back campaign.
Does it cost extra to have access to RFM Analysis in Prospect CRM?
RFM Analysis is built into Prospect CRM and is available to customers on Professional and Advanced subscriptions!
How can I turn my RFM Analysis into actionable insights?
Analyse where your customers sit in the RFM segments to send highly targeted marketing campaigns to drive retention, loyalty and sales growth. Consider the types of campaigns you could run based on each RFM segment.