RFM Segmentation
With Flashy’s new RFM segmentation tool, you can gain a deep understanding of your customers in depth – and utilize the data collected to make better marketing decisions!
Flashy’s RFM analysis is dynamic, just like the segments, with constant real time updating.
Let’s go over how you can begin developing intelligent automated analysis processes using flashy’s RFM segmentation tool.
Please note: the RFM segmentation tool is available in the Master package and higher.
What is RFM?
RFM Analysis is a segmentation technique that relies on analyzing your customers' past purchasing decisions. With the RFM tool, you can categorize your entire customer base into smaller groups based on similarities and then tailor your marketing efforts accordingly to each group's shared characteristics.
The RFM initials represent three main parameters:
Recency (R) refers to the date of the customer's most recent purchase.
Frequency (F) – the total number of orders made by the customer.
Monetary (M) – the total value of all customer's past purchases.
Flashy automatically categorizes your customers into 10 RFM groups, allowing you to tailor personalized messages for each group.
The benefits of using RFM based customer analysis are:
- Increased customer retention
- Increased conversion rate
- Increased revenues
Falshy’s 10 RFM Groups and Recommended Marketing Strategies
Flashy’s smart RFM segmentation tool automatically creates 10 different customer groups, according to the customer’s behavior. To maximize the benefits of the RFM tool – we have developed tailor-made marketing strategies for each group. Here are the key points you need to understand in order to boost conversions and sales by implementing group-specific marketing strategies for each of the 10 groups:
The "Hibernating" Group
Unique characteristics: this group of customers exhibits low engagement and has not made a purchase in a while.
Our recommendation: try to reconnect with these customers work on rebuilding their trust.
Marketing strategies that will work well for this group:
To increase “sleepy customers” engagement, the marketing strategy should focus on assuring them that they are not forgotten. Here’s a few ideas that might help you achieve this goal:
- Suggest better deals than the ones they have already gotten from you
- Personalize your offers
- Offer new products / new categories
-Try using different communication channels. It is possible that they did not receive your message because they did not check their emails. In that case, try sending an SMS!
- Send customized messages to enhance their trust and regain brand loyalty.
- Make sure you address common barriers to purchase in the messages you send
- Check your data for any complaints or messages of dissatisfaction that may have been sent by those customers. You can also directly ask them for their reviews. Use the data you have collected to improve.
The “About To Sleep” Group
Unique characteristics: this group of customers consists of individuals who have not made a purchase in a while and have low customer engagement. However, they are more likely to re-engage with your brand than inactive customers.
Our recommendation: try to keep them alert
Marketing strategies that will work well for this group:
- Send personalized offers
- Use Incentives, discounts and promotions, to motivate them to remain loyal to your brand
The “At Risk” Group
Unique characteristics: this group of customers is exhibiting signs of disconnecting from your brand.
Our recommendation: try to maintain contact with these customers
Marketing strategies that will work well for this group:
- Give them additional attention
- Use limited time offers to encourage them to reconnect now
- Include testimonials from happy customers in your emails
- Send personalized offers
- Consider offering larger discounts and more aggressive incentives to encourage them to remain engaged
The “Can't Lose Them” Group
Unique characteristics: this group consists of loyal customers who have made frequent purchases in the past, but have not made any recent purchases.
Our recommendation: express your gratitude and reward these loyal customers for their support.
Marketing strategies that will work well for this group:
- Send them messages offering early access to new products
- Create a customer loyalty program, such as a points program, that will allow loyal customers to collect points and earn discounts, giveaways or bonuses.
The “New Customers” Group
Unique characteristics: this group of customers consists of individuals who are new to your brand and require nurturing and attention.
Our recommendation: greet these customers with discounts and personal benefits to get them engaged with your brand
The “Need Attention” Group
Unique characteristics: this group consists of customers who have previously made purchases but require a boost to become more actively involved with your brand.
Marketing strategies that will work well for this group:
- Use personalized offers
- Create a customer loyalty program, such as a points program, to enhance brand loyalty
The “Promising” Group
Unique characteristics: this is a group of customers who are not highly loyal or engaged with your brand at this point, but are showing signs of potentially increasing brand engagement.
Our recommendation: make sure you nurture these customers and encourage them to increase their engagement with your brand.
Marketing strategies that will work well for this group:
- Encourage them to engage with the brand
- Use personalized offers
- Display customer reviews, recommendations and ratings
The “Potential Loyalists” Group
Unique characteristics: this customer group consists of individuals who make occasional purchases and have the potential to become loyal customers.
Our recommendation: prioritize nurturing these customers and building customer loyalty.
Marketing strategies that will work well for this group:
- Send personalized offers
- Create a customer loyalty program, like a points program, to enhance brand loyalty.
The “Loyal Customers” Group
Unique characteristics: this is a group of long term customers who make frequent purchases, they are not necessarily high value customers but are loyal to your brand.
Our recommendation: make sure you reward these customers for their long term loyalty and implement strategies that will increase their basket value
Marketing strategies that will work well for this group:
- Keep sending regular updates and promotions to these customers
- Send offers for luxury products / new products / back in stock / best selling / special products that complement their previous purchases
- Create a VIP experience by personally rewarding these customers with relevant discounts based on their purchasing history, and providing them with individually planned giveaways.
- Send them messages offering early access to new products
- Encourage them to write a review
- Send personalized thank you messages
- Provide brand ambassador program opportunities
- Take the time to create motivating content that reminds customers to utilize your products and offers helpful information.
- Create a customer loyalty program, like a points program, to enhance brand loyalty.
The “Champions” Group
Unique characteristics: your best customers
These are customers who are very loyal to your brand. They make frequent purchases and have the highest basket value over time.
Our recommendation: show your gratitude by providing personalized rewards and VIP treatment.
Marketing strategies that will work well for this group:
- Keep sending regular updates and promotions to these customers
- Send offers for luxury products / new products / back in stock / best selling / special products that complement their previous purchases.
- Create a VIP experience by personally rewarding these customers with relevant discounts based on their purchasing history and providing them with individually planned giveaways.
- Send them messages offering early access to new products
- Encourage them to write a review
- Send personalized thank you messages
- - Provide brand ambassador program opportunities
- Take the time to create motivating content that reminds customers to utilize your products and offers helpful information
- Create a customer loyalty program, like a points program, to enhance brand loyalty.
