What is RFM analysis?

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

• Recency — how recently a customer made their last purchase;
• Frequency — how often a customer makes purchases within a certain period;
• Monetary — how much money a customer has spent during this period.

This analysis helps identify the most valuable customers, determine those who may leave, and tailor marketing campaigns for different segments. For example, you can identify customers who haven't purchased in a long time and send them special offers to bring them back.