RFM segments: Segment customers with RFM analysis

How do I use RFM analysis to segment my customers?

🏷️ RFM segments are available on all Marsello pricing plans.

RFM analysis (Recency, Frequency, Monetary) measures customer loyalty and purchasing behavior, helping you understand and act on it.

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 is customer segmentation 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 and 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.

💡 Tip: RFM segments compare each customer to your average customer. Check days between orders on your Business performance dashboard and Spend per customer on your Customer dashboard (formerly the Omnichannel dashboard) to understand your average. For example, if a customer's days between orders is more than double your average, they may show up as At risk. More than 4 times your average, and they may show up as Cold.

Customer segments overview (Most → least engaged)

Best

Your most valuable customers who rank in the top 20% for both how much they spend and how often they order.

Typical behavior

Purchase frequently, their days between orders is no more than double the average customer
Have the highest total spend

Recommended actions

Offer VIP perks and exclusive rewards
Provide personal recognition
Encourage referrals and brand advocacy

Loyal

Repeat customers with strong engagement and spending habits.

Typical behavior

Purchase regularly, their days between orders is no more than double the average customer
Spend more than the average customer, but slightly less than Best customers

Recommended actions

Reward ongoing loyalty
Offer exclusive previews and promotions
Invite them to community events or early access campaigns

Promising

Customers with strong potential to become Loyal or Best customers.

Typical behavior

Have made recent purchases
Have placed 2 or more orders
Show average spending patterns

Recommended actions

Share your brand story and values
Follow up after purchases
Encourage social engagement and repeat visits

New

Recent customers who are new to your brand.

Typical behavior

Have completed one recent purchase or have low spend and order count so far
Recently joined your customer database

Recommended actions

Send welcome and onboarding emails
Create a memorable first experience
Encourage a second purchase quickly

Potential (previously Window shoppers)

Customers who are browsing but haven’t made a purchase yet.

Typical behavior

Created an account
Have not placed any orders

Recommended actions

Send welcome offers or discounts
Share personalized product recommendations
Use onboarding and nurture email sequences

At risk

Customers showing signs of declining engagement.

Typical behavior

Their days between orders is now more than double the average customer

Recommended actions

Launch win-back campaigns
Offer limited-time promotions
Send relevant product recommendations

Cold (formerly Lost)

Inactive customers who are at high risk of churn.

Typical behavior

Their days between orders is now more than 4 times longer than the average customer

Recommended actions

Run reactivation campaigns
Highlight new arrivals or product launches
Offer exclusive deals or incentives to return

📝 Note: Segments are mutually exclusive; each customer belongs to only one segment at a time.