Despite the current love affair with predictive models, direct marketing’s three-variable formula, Recency-Frequency-Monetary Value (RFM), still has a place in modern database marketing. RFM is not a replacement for inferential statistics. But in the real world, RFM can still be useful when models are not practical. RFM also provides a management summary of customer behavior based on purchases and plays a role in policing the black-box results of predictive models to ensure quality before a campaign is implemented.
Segmentation of Customers
Recency – Frequency – Monetary Value (RFM)
Validate a Predictive Model with RFM before You Contact Customers
A Modern Take on Recency
A Modern Take on Frequency
A Modern Take on Monetary Value
Best Practices for using RFM