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How Do I Use RFM Analysis to Segment My Customers?

RFM analysis (Recency, Frequency, Monetary) measures customer loyalty and purchasing behavior.

Updated today

🏷️ RFM segments are available on all Marsello pricing plans.

  • Identify your most valuable customers

  • Re-engage at-risk shoppers

  • Optimize your marketing strategies for stronger ROI


What is Customer segmentation?

Customer segmentation divides shoppers into groups based on shared characteristics. This makes marketing more targeted and effective.

Common types of segmentation include:

  • Demographic – age, gender, life stage

  • Geographic – location such as country, state, or city

  • Behavioral – purchasing patterns, e.g., last purchase date

Marsello focuses on behavioral segmentation through RFM analysis, giving retailers clear insight into customer value and engagement.


Why customer segmentation is important?

Every customer database is diverse, with unique shopping behaviors. Segmentation ensures the right message reaches the right customer at the right time.

How Segmentation helps:

  • Understand Your Business – Spot best customers, identify those at risk, uncover growth opportunities.

  • Boost Loyalty – Reward repeat buyers with personalized experiences and exclusive offers.

  • Enhance Email Marketing – Increase open/click rates with targeted campaigns.

  • Reduce Costs & Improve ROI – Focus resources on high-value customers for stronger returns.


How does Marsello calculate segments?

Marsello uses RFM analysis, based on:

  • Recency – How recently a customer purchased.

  • Frequency – How often they purchase.

  • Monetary – How much they’ve spent in total.

When you connect Marsello to your eCommerce or POS system, your customer database and order history sync automatically. Segments update daily and refresh instantly when a customer places a new order.
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Customer segments overview (Most β†’ Least engaged)

Segment

Description

Typical behavior

Recommended actions

Best

Most valuable, loyal customers with the highest lifetime value.

Purchase frequently within your average cycle; highest total spend.

Offer VIP perks, personal recognition, and advocacy opportunities.

Loyal

Repeat buyers with strong spend.

Purchase regularly but slightly less than Best customers.

Provide rewards, exclusive previews, and community events.

Promising

Customers with potential to become Loyal or Best.

Recent purchases, 2+ orders, average spend.

Share brand story, follow up after purchases, encourage social engagement.

New

First-time buyers.

One recent purchase, new to your database.

Onboard with welcome emails, create memorable first experiences.

Window Shoppers

Browsing but haven’t purchased.

Account created but no orders yet.

Use welcome offers, personalized recommendations, and onboarding sequences.

At Risk

Declining engagement.

No purchases in 2+ average cycles.

Send win-back campaigns, limited-time offers, and relevant recommendations.

Cold (formerly Lost)

Inactive customers at high risk of churn.

No purchases in 4+ average cycles.

Run reactivation campaigns, highlight new launches, or exclusive deals.

πŸ“ Note: Segments are mutually exclusive; each customer belongs to only one

segment at a time.


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