RFM model is an important tool and means to measure customer value and customer's ability to create benefits. Among many analysis models of customer relationship management, RFM model is widely mentioned. The mechanical model describes the value of a customer through three indicators: the recent purchase behavior, the overall purchase frequency and the amount spent.

The last purchase refers to the last purchase-when was the last time the customer came to the store, which mail order catalog was used for the last purchase, when did he buy the car, or when was the last time he bought breakfast in your supermarket?

Consumption amount:

Consumption amount is the backbone of all database reports, which can also verify Pareto Law-80% of the company's revenue comes from 20% of customers. The consumption of 10% customers before the display is at least twice that of the next level, accounting for more than 40% of the company's total turnover.

If we look at the cumulative percentage column, we will find that 40% customers contributed 80% of the company's total turnover; And 60% customers account for more than 90% of the turnover. The rightmost column shows the average consumption of each customer. The best 10% customers spend an average of 1 195 USD, while the worst 10% customers only spend 18 USD.

Theoretically, the value of m is the same as the value of f, and both of them have a time range, which refers to the consumption amount in a period of time (usually 1 year). At work, I think the price range of products is relatively simple for the categories of general shops.

For example, the price fluctuation range of the same brand of beauty cosmetics is basically within the acceptable range of a certain consumer group, and the purchase frequency of a single category is not high, so for general stores, the role of M value in customer segmentation is relatively weak.