What is RFM Segmentation?
RFM based Marketing Automation feature segments customers based on purchases for a specific time interval made by them. RFM segmentation or RFM metric can be used in multiple ways. But, it specializes in the three main features, namely,
- Simplicity in use
- Easy interpretation
- Yields a brief yet impactful result
NOT all your customers are created equal. Thus, instead of reaching out to all of them and treating them equally, execute your marketing strategies based on segmentation RFM. This can prove to be highly beneficial for your business in the future.
What do RFM Segmentation stands for?
- Recency – Enables you to acknowledge the fact that when was the last time a customer made any purchase order. To calculate the recency value- a day ago? 15 days ago? 90 days ago? Get the recent purchase date subtracted from the current date.
- Frequency – Brings you the result of how regularly does this customer makes a purchase. As, for example, 7 orders were placed in a particular time period, their frequency is 7.
- Monetary – (Purchase value) Facilitates you regarding the amount of money spent by the customer in a particular tenure. Sum up the monetary value from every transaction to get the M value.
Wondering How To Segment Customers in WooCommerce Store?
Well, you are in the right place. Get simpler access to segment customers on HubSpot and HubSpot WooCommerce Integration (official HubSpot Beta Integration Provider) provided by MakeWebBetter.
Customer Order Recency Rating:
The HubSpot Woocommerce Integration assigns recency in the range of 1-5, based on the last purchase of the customer.
However, a purchaser with recent purchases needs more attention than the ones who had made purchases year before.
At the same time, it is imperative to keep the customers engaged and hold them for long. The ones who did not actively participate in purchases for a long time (decreasing the recency).
- 5 (purchased within the last 30 days)
- 4 (purchased within the last 31 to 90 days)
- 3 (purchased within the last 91 to 180 days)
- 2 (purchased within the last 181 to 365 days)
- 1 (purchased more than 365 days ago)
Customer Order Frequency Rating:
Based on the absolute number of orders made by a customer since day 1. The frequency ratings can be assigned as:
- 5 (20 or more orders)
- 4 (between 10 and 20 orders)
- 3 (between 5 and 10 orders)
- 2 (between 2 and 5 orders)
- 1 (1 order)
Customer Order Monetary Rating:
The monetary ratings can be assigned in the same way as frequency rating by analyzing the total amount of money spent on day 1 in the following manner:
- 5 (spent more than $1,000)
- 4 (spent between $750 and $1,000)
- 3 (spent between $500 and $750)
- 2 (spent between $250 and $500)
- 1 (spent less than $250)
Automate RFM segmentation through HubSpot Workflows:
The use of RFM segmentation begins from the moment when the admin checks the metrics and delivers the right actions to their customers at the right time.
HubSpot’s workflow with HubSpot WooCommerce Integration is ready to perform all the actions.
For example – let’s say you have a consumer with Monetary rating 5 (who spent more than $1000), order Frequency rating 5 (more than 20 orders) and last order of the customer was 30 days ago.
The order Recency rating of the customer will be reduced from 5 to 4 (purchased within last 31 to 90 days) thus indicating that one of your highly valuable customers might not be interested. Thus, signaling you to discuss out the issues with your customer and take up all the measures to get them back through calls, personalized emails or a coupon code.
You can easily set up those rules to automate the task and keep your highly converted customers engaged at a higher level using HubSpot Workflows. Thus, driving a lot of traffic on your eCommerce website.