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Insight RFM Analysis

RFM analysis is a customer segmentation technique based on past purchasing behavior to segment customers.

• Recency (R) – Duration from last purchase to date

• Frequency (F) – Total number of sales during the specified period

• Monetary (M)  – Monetary value of all purchases within the specified period

After these metrics are determined, customer data is divided into 5 equal parts on a metric basis. These numbers are then combined to assign an RFM score.

This analysis aims to determine the customers' possible purchasing tendencies depending on the number of purchases they have made and the amount of expenditure of these purchases, as well as their past shopping habits.

The main purpose is to find the answer to the question “who are our most valuable customers”.

- are the ones who shop frequently
- in the nearest time interval
- and spend a lot of money.