RFM (Recency, Frequency, Monetary) analysis data empowers CPG brands to reach their target audience with greater precision and maximize the return on their programmatic media investments. RFM is used to segment existing customers based on purchase patterns and buying behaviors. Marketers can leverage these insights to personalize the creative messages and offers delivered to all of these shopper segments. In this blog post, we will focus on how RFM analysis data helps CPG brands increase customer acquisition, retention and conversion.
What is RFM analysis?
While there are multiple audience segmentation strategies available in the marketplace, RFM is a powerful type of audience segmentation that helps marketers understand shopper behavior. Specifically, MiQ’s RFM allows brands to understand how customers are interacting with their brand now versus how they previously interacted. This insight gives brands the ability to dig into behavioral shifts and how to influence positive LTV (lifetime value).
With an RFM analysis, marketers can segment their customers into distinct audiences based on recency, frequency, and monetary value.
- Recency – How recently a customer has made a purchase
- Frequency – How often a customer makes a purchase
- Monetary value – How much money a customer spends on the purchase
With an RFM analysis, marketers can identify core, high-value customers, as well as promising or slipping consumers. This allows advertisers to create programmatic media campaigns that resonate with a target audience more effectively by reaching them on specific channels with the messaging that is most effective for their specific segment.
With RFM analysis, advertisers can better understand their consumers and the likelihood that they will purchase a particular product, leading to activation strategies that drive ROI by eliminating investment waste. But that’s just the beginning. In today’s era of personalization, MiQ’s Consumer Link RFM analysis empowers CPG brands to create hyper-personalized programmatic media campaigns that appeal to specific customers depending on where they are on their purchase journey.
Data-driven targeting capabilities, coupled with highly relevant and personalized ads delivered to distinct customer segments lead to more performant programmatic media buys.
For example, a loyal customer of one specific SKU could be a loyalty program message to increase their retention probability. A first-time customer might convert again quickly with a complementary product message, building loyalty and overall customer value. And a competitor’s slipping customers might just switch over with a well-timed coupon promotion.
That’s right – with MiQ’s RFM Analysis, you can see (and target) your competitor’s at-risk shopper segments to secure new customers and capture additional dollars.
With an RFM analysis, marketers can tailor messaging to specific audiences and leverage a dynamic creative optimization strategy that ensures each consumer receives a customized advertising experience that drives interest, engagement, and action.