How to use a RFM analysis to segment your email marketing database

It’s no secret that a well-segmented database is key to a personalized communication strategy. You can tailor your message perfectly to what your customers need. And as a company, you can quite easily track your campaign objectives.
A popular method is to apply an RFM analysis, which enables you to segment your database according to recency, frequency and monetary value.

Can you track the purchases of subscribers to your email list? Then follow these steps to take it to the next level.

1. Measure recency
When have your subscribers last bought something from you? Divide your subscribers into 3 categories, i.e. purchased over the last month, purchased over the last 6 months, purchased over the last 12 months.

2. Measure frequency
Measure how often your subscribers are buying from you, i.e. purchased +5 products yearly, purchased 2 to 5 products yearly or purchased one product/none yearly.

3. Measure monetary value
How much do your subscribers averagely spend on every sale? Again, divide them into 3 categories according to the pricing of your product(s) or service(s),
i.e. + €500, €250 – 499, €0 – €249.

Now you have a matrix of 9 fields and you can create 27 different segments according to your categories. Next, apply this to your email marketing database. This will help you get clearer insights into your database and you’ll find new opportunities for cross-selling and upselling. The last step is to apply this to your email marketing campaigns, and to personalize your emails according to which segment your subscriber is in. Your subscriber will not only get relevant content tailored to his needs, he will most likely be the one to help you take your email marketing to the next level.

Conclusion: use an RFM analysis to segment your database and to personalize your content according to your client’s needs and your company’s expectations.

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  1. [...] and you can create 27 different segments according to your categories. Next, apply this to your Email Marketing Database. This will help you get clearer insights into your database and you’ll find new opportunities [...]

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