This document discusses RFM segmentation, which is a technique used in e-commerce to segment customers based on their Recency (R), Frequency (F), and Monetary (M) value. It was developed in the 1970s to help companies focus their marketing efforts on the most valuable customers. The document explains how RFM scoring works and provides examples of how customers in different RFM segments may be treated differently, such as high-value customers receiving personal assistance or discounts. The overall message is that RFM segmentation is important for identifying the customers most worth retaining and exceeding expectations for.

1. RFM SEGMENTATION

2. "People are frugal in guarding their
personal property; but as soon as it
comes to squandering time, they are
most wasteful of the one thing in which
it is right to be stingy."
Seneca

3. In e-commerce, you can’t treat every customer the same
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4. Not everybody deserves
your full attention.
Because that would be
too expensive and
exhausting.
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But some customers...

5. RFM segmentation
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6. Omniconvert Customer Value Optimization Academy, 2021

7. Omniconvert Customer Value Optimization Academy, 2021

8. In the 70', direct mailing was
expensive, so they wanted to
save money.
Their reasons were to
separate those who bought
from them regularly from
those who stopped buying,
who weren't worth
addressing.
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9. RFM segmentation is
essential for identifying the
ideal customers and
exceeding the expectations of
the ones that deserve it.
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10. Omniconvert Customer Value Optimization Academy, 2021

11. The RFM Score Mapping
Access the mapping
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12. Who are the customers that spend the most?
1
2
Who are the most loyal customers that come back to
my website and place a second order, third, etc.?
3 Who are the newest customers?
4 What customers am I about to lose?
5 Who have I already lost?
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13. R
1 e.g the last order
was 2 years ago
Recency
2 e.g the last order
was 1 year ago
3 e.g the last order
was 6 months ago
4 e.g the last order
was 3 months ago
5 e.g the last order
was 1 month ago
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14. F
1
Frequency
2
3
4
5
e.g they place 1 order
in their lifetime
e.g they place
between 2-3 order
e.g they placed 4 - 10
orders
e.g they placed
between 10 - 20 orders
e.g they placed more
than 20 orders in their
lifetime
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15. M
1 e.g Their total revenue is
<$30
Monetary
2 e.g Their total revenue is
$30- $50
3 e.g Their total revenue is
$50- $100
4 e.g Their total revenue is
$100- $200
5 e.g Their total revenue is
>$200
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16. R F M
2 3 4
1. Write them a handwritten letter
2. Give them a courtesy call and ask
about their experience
3. Give them a special treatment
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17. R F M
5 1 5
1. Personal assistance
2. Special discount codes
3. Handwritten letter
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18. The impact of RFM segments on your business
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19. If you want to expand your
eCommerce horizons,
sign up for the Customer
Value Optimization Course.
cvoacademy@omniconvert.com
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