Buying behavior is one of the most important indicators of future repeat purchases and customer loyalty.

REVEAL applies RFM Segmentation and automatically displays customer groups such as VIP, Active, Dormant, Lost customers so that eCommerce professionals can reward each group according to its value.

RFM segmentation is a method to identify the most important type of customers by grouping them according scores to their recency, frequency & monetary values.

That allows companies to target specific clusters of customers with more relevant for their particular behavior – and thus generating higher rates of response, increased loyalty and better customer lifetime value.

Once REVEAL accesses RFM values from your customer historical data, REVEAL will assign a score from one to five to recency, frequency, and monetary values individually for each customer. Five is the best/highest value, and one is the lowest/worst value. A final RFM score is calculated simply by combining individual RFM score numbers.

RFM values and RFM scores are different. Value is the actual value of R/F/M for that customer, while the Score is a number from 1-5 based on the value.

We call a VIP customer the one who is the most active, placed the highest number of orders and spent the highest amount of money compared to the other customers. Knowing who they are, how many and how much they contribute to your revenue, helps e-commerce professionals tailor their communication and customer experience with this group. These are precious customers you don’t want to lose.

On the other hand, Lost customers who placed their last order a long time ago may not worth the effort of bringing back.

You can learn more about this here.

Also, find out why RFM matters in eCommerce from this short video.