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Marketing Analytics - Assignment 2

This document discusses performing an RFM analysis on customers. It assigns recency, frequency, and monetary value scores to customers based on their purchase history over time. Customers are grouped into clusters based on their combined RFM scores. The best performing cluster is identified as having the highest monetary value and second highest frequency. A recommendation is made to improve the recency of that top cluster. Marketing actions are proposed like limited time offers, personalized emails, and targeting the most loyal and potential loyal customer segments.

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Siddharth Singh
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68 views

Marketing Analytics - Assignment 2

This document discusses performing an RFM analysis on customers. It assigns recency, frequency, and monetary value scores to customers based on their purchase history over time. Customers are grouped into clusters based on their combined RFM scores. The best performing cluster is identified as having the highest monetary value and second highest frequency. A recommendation is made to improve the recency of that top cluster. Marketing actions are proposed like limited time offers, personalized emails, and targeting the most loyal and potential loyal customer segments.

Uploaded by

Siddharth Singh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Marketing Analytics –

Assignment 2
RFM Analysis

Abhishek Upadhyay – B2020004


Pranav Arora- B2020037
Pranoy Paes- B2020038
Siddharth Singh- B2020054
Syed Mohammad Yamaan- B2020056
RFM Scoring

If Customer has bought


If Customer has bought a greater If Customer has bought in high
recently then gets higher
number of times gets higher points value gets higher points
points
Assigning Score
Assigning Recency Score
• Assigned 3 score to customer whose Recency is less
than one and half year.
• Assigned 2 score to customer whose Recency between
1.5 years to 3 years.
• Assigned 1 score to customer whose Recency is more
than 3 years as only 4-5% of customers gets converted
from this segment.

Assigning Frequency Score


• Assigned 3 score to top 33% of customer who bought
more than 3 times, Next 33% gets 2 score who bought
more than once but less than 3 and bottom 33% gets 1
score, respectively.

Assigning Monetary Score


• Assigned 3 score to top 33% of customer who spend
amount more than 45 , Next 33% gets 2 score who
spent amount more 27.5 but less than 45 and bottom
33% gets 1 score, respectively.
Insights
 Cluster 6 is the best cluster with highest Monetary Value and second highest Frequency
 Recommendation would be improving the Recency of Cluster 6
 Make limited time offers based on past purchases
 Send personalized emails to reconnect offer renewals and provide helpful resources
Assigning
Score
Calculation
RFM Analysis
Important Segments & Marketing Actions

Potential Loyalist
Loyal Customer (18%)
(12%)
Having the RFM score
Having RFM score of
of 332 and 331
323, 322 and 321

Upsell higher value Recency Value is high


Recency and Frequency Reward them. Can be
products, Offer with average
value is high we need early adopters for new
membership / loyalty frequency, we need to
to focus on Monetary products. Will promote
program, recommend improve the Monetary
Value your brand.
other products. value.
Thank you

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