The Ultimate Guide to RFM Analysis: 3 Major Indicators

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As customer relationship management becomes increasingly important, brands often need some tools and indicators to analyze customer structure by group. You may also want to conduct differentiated marketing and communication based on different customer values ​​and characteristics, thereby improving resource allocation and maximizing the benefits of CRM .



Among them, the RFM model is most commonly used by enterprises in practice.



In this article, I will tell you the detailed steps of using the RFM analysis model to help you find customer pain points and opportunities. I will also use 6 actual brand cases to explain how you can break iran whatsapp phone number pain points and seize opportunities after completing the analysis, thereby increasing customer lifetime value (LTV) and improving the integrity of the customer relationship management system.




Table of contents
What is the RFM analysis model? 3 key dimensions, divided into 8 types of customer groups
RFM and LTV have the same purpose: improving customer lifetime value should also start from these three levels
How RFM analysis helps to accurately target audiences and discover marketing opportunities and pain points
6 Brand RFM Application Examples: How to build a sound CRM based on opportunities and pain points?
Start RFM analysis immediately and start a successful CRM!
RFM analysis model (RFM model): 3 key dimensions, divided into 8 customer groups
The marketing company Invesp mentioned the following 3 key data in its research and analysis of old customer retention and new customer acquisition :

(1) Existing customers are 50% more willing to try new products than new customers, and are willing to spend 31% more on new products.
(2) The cost of acquiring new customers is more than 5 times that of retaining old customers.
(3) Every 5% more old customers retained can increase overall profits by 25%-95%.

It can be seen from this that it will be a better resource allocation model for brands to invest resources in the analysis and retention of existing customers, and in-depth and long-term relationship management. The best tool to start customer structure analysis is the RFM analysis model.

The RFM analysis model was proposed by George Cullinan in 1961, but its application has not become outdated, but has endured. In 1994, Arthur Hughes of the American Database Marketing Institute pointed out that there are three most important indicators in the customer database that can be used to analyze customer value. They are still used by many corporate brands today, namely: