Introduction to RFM analysis

Introducing RFM Before the analysis , Let's take a brief look at exploratory analysis .

The so-called exploratory analysis , It is mainly the process of using some analytical methods to find unknown and valuable information from a large number of data . For preliminary exploratory analysis , Data visualization is a very convenient 、 Fast 、 Effective methods , You can use drawing 、 Tabulation and other methods to find the distribution characteristics of data , Then , Some statistical analysis methods can be used to find the information behind the data more deeply . Common exploratory analysis methods include RFM analysis 、 Clustering analysis 、 Factor analysis 、 Correspondence analysis, etc .

RFM What do these three letters mean ？

R:Recency—— The time interval of the customer's last transaction ,R The bigger the value is. , Indicates that the longer a customer transaction takes place ; conversely , Indicates that the date when the customer transaction occurs is closer .

F:Frequency—— The number of transactions made by customers in the latest period of time .F The bigger the value is. , The more frequent the customer deals ; conversely , The customer is not active enough .

M:Monetray—— The amount of the customer's transaction in the latest period of time .M The bigger the value is. , The higher the customer value ; conversely , Indicates that the lower the customer value .

RFM Principle of analysis

R_S classification	F_S classification	M_S classification	Customer type
high	high	high	High value customers
low	high	high	Focus on keeping customers
high	low	high	Focus on developing customers
low	low	high	Focus on retaining customers
high	high	low	General value customers
low	high	low	Generally keep customers
high	low	low	General development clients
low	low	low	Potential customers

            high ： Above average ; low ： Means below average R_S、F_S、M_S Represent the R、F、M Standard rating value

RFM The analysis process ：

step1： Calculation RFM Score of each item （R_S、F_S、M_S）

step2： Summary RFM The score is

step3： according to RFM Score is used to classify customers

R_S: The score is calculated based on the latest trading date , The closer to the current date , The higher the club .

F_S: Calculate score based on transaction frequency , The higher the frequency of trading , The higher the score .

M_S: Calculate the score based on the transaction amount , The higher the transaction amount , The higher the club .