Reports and analytics
Segment customers by buying behaviour (RFM)
Group your customers by how recently, how often and how much they bought over the last 12 months, and see who your champions are and who is slipping away.
3 min readLast updated
In this article
RFM segmentation ranks customers by what they actually do, not by what you assume. It looks at three things over the last 12 months of sales and puts every customer in a segment you can act on: thank the champions, win back the ones at risk, stop spending effort on the lost.
The three dimensions
Recency: how recently the customer last bought. More recent is better.
Frequency: how many times they bought in the last 12 months.
Monetary: how much they spent in total over that time.
Each dimension is scored from 1 to 5 by ranking all customers into five equal groups: 5 is the best fifth, 1 the lowest. The three scores together decide the segment.
Generate the segments
Open CRM › Reports & Analytics › Segmentation.
Select Generate RFM.
The system analyses the sales invoices of the last 12 months and adds a segment report to the list, with its Name, Type, number of Members and Status. Select What is RFM? A quick guide to this report on the screen for a short explanation of every segment.
Run it again whenever you want a fresh picture, for example at the start of each month or quarter. Each run is a snapshot; delete old ones with Delete when you no longer need them.
Read a segment report
Select View on a report.
Label distribution shows how many customers fall in each segment.
Click a segment to list its Customers, with their Email, Mobile and RFM score.
What each segment means and what to do
Segment | Who they are | What to do |
|---|---|---|
Champions | Bought recently, often, and spent the most. | Thank them, offer early access, ask for referrals. |
Loyal | Buy often and spend well. | Keep them close with service and loyalty offers. |
Potential Loyalist | Recent buyers with average frequency. | Nurture them into loyal customers. |
New Customers | Bought recently, not often yet. | Welcome them and make the second purchase easy. |
Promising | Recent buyers who have spent little. | Show them more of your range. |
Need Attention | Above average but starting to slip. | Re-engage them before they drift. |
About to Sleep | Below-average recency and activity. | Remind them with a timely offer. |
At Risk | Spent a lot and bought often, but not for a long time. | Call them; find out what changed. |
Cannot Lose | Former best customers who have not returned. | Make a personal win-back effort. |
Hibernating | Long since their last purchase, low spend. | Low-cost reminders only. |
Lost | Lowest on all three. | Do not spend much effort; review why. |
Others | Do not fit a standard segment. | Review individually. |
Act on the segments
Add the customers of a segment to a campaign - a thank-you to Champions, a call-round to At Risk.
Compare with customer value and churn risk to decide where effort pays off.
For one customer, the RFM card on Customer 360 works on any period you choose.