What type of analysis can be done from RFM Segment history?

What type of analysis can be done from RFM Segment history?

Track easily

 Which Customer from which RFM segment switched to which RFM Segment on which date?

    This will help you to analyze over the result of the Marketing strategies that you implemented on Customers based on the Segment to which they belong.

    For example, as shown in the figure let us consider here Amit Hapani Customer,

 On 31/08/2022, Amit Hapani because of his purchasing behavior switched from the Promising-Faithful segment to the Loyal Segment. Let us recall that the Promising-Faithful Segment defines the Customers who have bought recently(R) but spent less(M).

 Loyalty programs that encourage them to spend more and more were held for all customers of the Promising-Faithful segment.

 Amit Hapani spend more at your Business because of which switched to Loyal Segmentation.

 This will help you to know the outcome of the marketing strategy that is implemented for customers who belong to the Promising-Faithful segmentation.

 Again, knowing that customer Amit Hapani now belongs to Loyal Segmentation which defines the customers who buy frequently from your store, can still be converted to segmentation that is more beneficial for your business. 

 Loyalty programs and rewarding these customers with Free Shipping and other benefits can motivate customers of Loyal Segmentation to purchase more and more which will lead them to the highest paying segmentation.

 So when this strategy was again implemented on Loyal segmentation customers, they were motivated to purchase more because of free shipping deliveries and other such services which lead Amit Hapani to Highest Paying Segmentation.

 Converting Amit Hapani from Promising-Faithful segmentation to Loyal Segmentation to Highest Paying Segmentation leads to an increase in Profit margin in your business.

This is how RFM analysis helps you analyze the type of purchasing nature of Customers based on the segment to which they belong thus implementing the right marketing strategy will help you to convert them to the Segment which is beneficial for your business.

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