Reach Frequency, Monetary (or RFM) analysis is a longstanding tool for identifying segments of customers that are higher value.
RFM takes into account 3 factors for determining the value of different customers:
When did the customer last buy an item? Can we identify if a customer is “active” or has “lapsed”?
How many times has a customer made a purchase? Can we identify customers who make many purchases, or few purchases?
How much in total has each customer spent?
Using some mock data from dunnhumby I was able to put together a dashboard in PowerBI to showcase the utility of having this analysis in interactive form.
For more details on this RFM analysis check out my post over on the Panalysis blog.
One thought on “Recency, Frequency, Monetary framework for Customer Segmentation in PowerBI”
Appreciated if you can submit the resorces (Data + Pbix file).