RFM Analysis
Customer segmentation by Recency (time since last purchase), Frequency, and Monetary value. Highlights your best customers and those at risk of churning.
In practice
RFM is the X-ray of your customer base. Five minutes in Klaviyo shows you: VIPs, 'former' VIPs who've gone quiet, and one-time buyers. Each group needs a completely different message.
Common misconception
'RFM is complicated to calculate.' Klaviyo computes RFM automatically: Champions, Loyal, At-Risk, Lost. No spreadsheet required.
How to fix it
'At Risk' customers not responding? (1) Change the channel — if email isn't working, try SMS, (2) change the offer — is a discount not enough? Try something new or exclusive, (3) check what happened when they left, (4) accept that some are gone for good.
Example
A coffee store: 1,200 'At Risk' customers. Win-back message: 'We've missed you — a free cup of coffee with your next order.' 34% returned, generating $13,500 from a single campaign.
Priority
Run RFM in the first quarter. In Klaviyo: Profiles → Predictive Analytics → RFM. Focus: (1) pamper Champions, (2) rescue At-Risk customers.
Related terms
Keep learning. Metrics that touch the same area:
- ConversionAnalyticsA desired action a visitor takes — a purchase, sign-up, form submission. The basis for measuring marketing success.
- Conversion Rate (CR)AnalyticsThe percentage of visitors who completed a desired action. Average: 1-4% for purchases, depending on category.
- ATC – Add To CartAnalyticsThe action where a visitor adds an item to the cart. Average ATC rate: 8-10% of product page visits.
- Cart AbandonmentAnalyticsA customer added an item to the cart but didn't complete the purchase. Average: 70-75%. One of the biggest opportunities.
- Open RateAnalyticsThe percentage of recipients who opened the email. Average: 20-25% in eCommerce.
- Click RateAnalyticsThe percentage of recipients who clicked a link. Average: 2-3%. A CTOR (click-to-open rate) of 10-15% is a good target.
Jimmy tracks your RFM Analysis, automatically
WhatsApp alerts when something important changes. No dashboards, no hassle.