recency, frequency, monetary

Definition

A customer segmentation method analyzing when someone last purchased, how often they purchase, and how much they spend. Abbreviated as RFM, it's the scorecard that determines whether you get the good coupons or the desperate ones.

Example Usage

Our RFM analysis identified high-value customers who haven't purchased recently, making them perfect targets for our win-back campaign.

Origin

Direct marketing methodology from the 1960s-70s, pioneered by catalog retailers

Fun Fact

Catalog companies like Sears perfected RFM analysis decades before 'big data' became a buzzword, proving that algorithmic customer scoring is not actually new—just digitized.

Source: Direct marketing and customer analytics methodology

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