RFM SQL segments

You can create an RFM (recency, frequency, monetary) Segment Extension to target your best users by measuring their purchasing habits.

RFM analysis is a marketing technique that identifies your best users by scoring users on a scale from 0—3 for each category (recency, frequency, monetary), where 3 is the best score and 0 is the worst. Recency, frequency, and monetary values are all based on data from a specific time range of your choosing.

RFM categories

Category	Definition
Recency	How recently a customer made a purchase. A higher score means more recent purchases.
Frequency	How frequently a customer made a purchase. A higher score means higher frequency.
Monetary value	Total amount of money a customer spent. A higher score means higher spending.

Creating an RFM segment

1. Go to Audience > Segment Extensions.
2. Select New Extension, and then select Recency, frequency, and monetary value (RFM) segment.

3. In the Variables panel, select your Time Range to specify the time period of purchase data to analyze. The time range you select will be the time range that user behavior data gets pulled from and depends on your campaign goals.

Time range field	Description	Use case
Relative	Specify activity within the past X days	Analyze the most recent user behavior with a rolling window.
Start date	Specify a fixed starting point for your analysis	Analyze user activity from a specific date onward, such as after a campaign launch.
End date	Specify a fixed ending point for your analysis	Analyze user activity up to a specific date, such as before a product update.
Date range	Specify both a start and end date for a custom period	Analyze user behavior during a defined period, such as a promotional event.

4. Select the generated RFM groups to include in your segment. If you select multiple groups, your segment will include users who are part of any of the selected groups.

5. Run a preview and then save your segment

RFM groups

RFM segments are evaluated in a specific order. Users are assigned to the first segment whose criteria they meet from the top of the prioritization list down. For example, a user who qualifies for both “Champions” and “Loyal Users” is assigned to the “Champions” segment because it has a higher priority.

RFM group	Segment description	Recency (R) rank	Frequency (F) rank	Monetary (M) rank
Champions	The most valuable user segment with top scores in all categories.	3	2-3	2-3
Loyal Users	Users who have high recency and high frequency. May have lower monetary value than Champions.	2-3	2-3	1-3
Potential Loyalists	Users who purchased recently with moderate frequency and moderate monetary value.	3	1-3	1-3
Promising	Users who made a recent, high-value initial purchase but have not yet established a high purchase frequency.	3	0-3	1-3
New Customer	Users who made their first purchase very recently.	3	0-3	0-3
Needing Attention	Users with above-average recency, but their purchase frequency or monetary value are below average.	2-3	0-3	0-3
Cannot lose them	Users who were previously high-value with good frequency and monetary scores, but have not purchased in a long time.	0-1	2-3	2-3
At Risk	Users who have historically had moderate frequency and monetary scores, but have not purchased in a long time.	0-1	1-3	1-3
About to Sleep	Users who have low scores across all metrics.	1	0-3	0-3
Hibernating	Users who have moderate frequency but have been inactive for an extended period.	0	0-2	0-3