What Is RFM Analysis?
RFM stands for:
- Recency — How recently did the customer purchase? (Last week vs 6 months ago)
- Frequency — How often do they purchase? (Once vs 5 times)
- Monetary — How much do they spend? (₹500 total vs ₹15,000 total)
By scoring customers on these three dimensions, you can segment them into groups and tailor your marketing to each group.
The 6 Customer Segments
| Segment |
RFM Profile |
% of Customers |
Marketing Strategy |
| Champions |
Recent, frequent, high spend |
5-10% |
VIP treatment, early access, referral program |
| Loyal Customers |
Frequent, good spend |
10-15% |
Loyalty rewards, cross-sell, upsell |
| Potential Loyalists |
Recent, moderate frequency |
15-20% |
Nurture to increase frequency. Second purchase incentive. |
| At-Risk |
Used to buy frequently, not recently |
10-15% |
Win-back campaign. ‘We miss you’ + discount. |
| Can’t Lose Them |
High spend historically, inactive now |
5-10% |
Aggressive win-back. Personal outreach from founder. |
| Lost |
Long time ago, infrequent, low spend |
30-40% |
Low-priority. Occasional re-engagement email only. |
Step-by-Step: RFM in Google Sheets
Step 1: Export Customer Data from Shopify
- Go to Shopify Admin → Customers → Export all customers
- You need: customer email, last order date, total orders, total spent
- Open in Google Sheets
Step 2: Score Recency (1-5)
- Sort by last order date
- Divide into 5 equal groups (quintiles)
- Score 5 = most recent (ordered in last 30 days)
- Score 1 = least recent (ordered 6+ months ago)
Step 3: Score Frequency (1-5)
- Sort by total orders
- Divide into 5 equal groups
- Score 5 = highest frequency (5+ orders)
- Score 1 = lowest frequency (1 order)
Step 4: Score Monetary (1-5)
- Sort by total spent
- Divide into 5 equal groups
- Score 5 = highest spend (top 20%)
- Score 1 = lowest spend (bottom 20%)
Step 5: Combine Scores and Segment
- Concatenate R, F, M scores: a customer with R=5, F=4, M=5 is ‘545’
- Map to segments using the table above
- Champions: scores like 555, 545, 554
- Lost: scores like 111, 112, 121
What to Do With Each Segment
Champions (5-10% of customers, 25-40% of revenue)
- Send personal thank you from the founder
- Early access to new products (before anyone else)
- Exclusive WhatsApp group for feedback and previews
- Referral program with meaningful incentives
- NEVER send discount offers to champions — they buy at full price
At-Risk Customers (10-15%, declining engagement)
- Win-back email sequence: ‘We noticed you haven’t shopped with us recently’
- Offer 15-20% ‘come back’ discount
- Show them what’s new since their last purchase
- WhatsApp message from a real person (not automated) for high-value at-risk customers
Lost Customers (30-40%, long inactive)
- Low-effort re-engagement: quarterly email with best-sellers
- Don’t spend heavily on win-back for this segment
- Clean from active email list after 6 months of no engagement (improves deliverability)
Need Help With Customer Segmentation?
At Growww Tech, we implement customer segmentation and retention strategies for D2C brands. Let’s open up your customer data.
Related reading:
