The analysis of the modeloRFM (recent purchases, purchase frequency and purchase amount) is a marketing technique applied to segment of customers, based on history of each one of them buying behavior. The RFM method has become an indispensable tool in making important decisions in the areas of marketing, sales and customer organizations. A related site: Linkedin mentions similar findings. It is mainly focused on identifying segments or groups of customers which presented a similar behavior in their purchases and that serves as a basis to define strategies for marketing to each of these segments. The fundamental premise of the RFM analysis is that customers who have bought recently, who have invested more and have made major purchases, are more likely to respond to a particular offer to other customers who have purchased less often and in smaller amounts. This model can also be used to establish special offers of welcome to new customers, stimulating small buyers for that invest more in your business and thus encourage other marketing initiatives. Likewise the RFM model studied variables about the behavior of previous clients, which is easy to trace and easy access. A study of recent purchases that a customer with respect to the time that leads made with your company is made. Purchase frequency is the time in which the customer has made purchases (such as the number of average purchases per year).
Purchase amount is the total of money invested by the customer in a certain period of time. Example of the RFM model: the Book Club BookBinders BookBinders is an American company that sells specialized books and other products selected through direct marketing. New customers are result of advertising in magazines, newspapers and television. After joining the Club, customers receive regular shipments containing offers of new titles and, occasionally, related products. Since its inception, BookBinders took the strategic decision to build and maintain a detailed database on the members of the club that contains all relevant information of their customers.