GROUP PRESENTATION

1. RFM model

2. Consumer Behaviour anaLYTiCs
Group memBers: pGCm-4
BiTasTa Bhadra 1407
ChinTan desai 1408
naYana mahajan 1417
nishanT naGda 1420
Submitted to:
Mr Mehul Joshi.
RR
FF
MM

3. Collaboration Exercises #2, pg. 366

4. WhaT is rFm?

5. WHY RFM?

6. Collaboration Exercises #2, pg. 366
Getting started with
RFM...

7. Collaboration Exercises #2, pg. 366

8. Collaboration Exercises #2, pg. 366

9. Collaboration Exercises #2, pg. 366

10. Collaboration Exercises #2, pg. 366
RFM Calculation

11. Recency Frequency Monetary RFM
5 5 4 554
5 5 3 553
5 4 5 545
5 3 3 533
5 3 3 533
5 3 3 533
Contd…
Similarly, we code the other quintiles and combine the scores to obtain RFM
values.
“555” is the best score.

12. Collaboration Exercises #2, pg. 366
Life stages for RFM model

13. High Potential Falling Potential
High
Value
Low
Value Stage 1
Stage 2 Stage 3
Stage 4
RFM Life StageRFM Life Stage
Stage1: Triers
Stage2: Buyers
Stage3: High Value, but
Falling Potential
Stage4: Low Value &
Falling Potential

14. What is RFM Analysis?
 RFM Analysis helps companies decide which customers to give selected offers
and promotional items.
 It is a process for companies to find ways to increase customer spending.
 Companies can even use it to target lost customers and give them incentives
to purchase items
 RFM Analysis can help companies keep track of their customers and build a
relationship that can increase sales and productivity.
 It also identifies minimal losses – customers spend low dollar amounts in small
quantities

15. Strengths of RFM Analysis
 Companies have data that can be used for target marketing.
 Marketing budgets will be focused on customers who are more recent, more
frequent and spend more.
 Specific targeting can increase profit and reduce costs; companies gain by not
spending on customers who will not add value
 You can offer incentives to middle scoring customers to increase their
purchases
 Analysis is quick and easy to interpret.

16. That’s all folks..!!!