What is RFM analysis?

RFM analysis is a method of customer segmentation based on three metrics:

• Recency — how recently a customer made a purchase;
• Frequency — how often a customer makes purchases;
• Monetary — how much money a customer has spent over a certain period.

This analysis helps identify the most valuable customers and determine who needs additional attention or incentives. For example, customers with high frequency and large amounts, but recent purchases, are considered loyal and profitable.

Example: if a customer bought a product yesterday (Recency = 1 day), purchases frequently (Frequency = 10 times per month), and spends a lot (Monetary = 5000 rubles), then they are a marketing priority.