Recency, Frequency, and Monetary (RFM)


RFM analysis is used to quantitatively group customers based on the recency, frequency and monetary total of recent purchases and other transactions. It helps brands identify their best customers and perform targeted marketing efforts.

A common way of using RFM is to use a three-digit rating for the score, consisting of:

  • Recency: How recently the customer made a purchase
  • Frequency: How frequently the customers makes purchases
  • Monetary: The value of the purchases made

If using a 1-5 scale for each, a total RFM score where recency is 3, frequency is 4, and monetary is 5 would be calculated as 3+4+5 or 12.


Average Order Value (AOV)

Customer Lifetime Value (CLV)

North Star Goal: Customer Lifetime Value Model