RFM (Recency, Frequency, Monetary)

Recency, Frequency, Monetary (RFM) is a customer segmentation technique used to understand and categorize customers based on their buying behavior.Recency: This aspect looks at how recently a customer has made a purchase or engaged with the business. Customers who have interacted or bought recently are often considered more valuable because they are more likely to do so again in the near future.Frequency: Frequency assesses how often a customer makes purchases or engages with the business. Customers who buy or interact frequently are often seen as more loyal and valuable.Monetary: This dimension examines how much money a customer spends with the company. Customers who spend more tend to be more profitable for the business.By analyzing these three dimensions, RFM helps businesses tailor their marketing strategies and customer engagement efforts to different customer segments, allowing for more effective and personalized approaches to retain and grow their customer base.

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