What Is RFM Analysis?
RFM stands for:
- Recency — How recently did the customer purchase? (Last week vs 6 months ago)
- Frequency — How often do they purchase? (Once vs 5 times)
- Monetary — How much do they spend? (₹500 total vs ₹15,000 total)
By scoring customers on these three dimensions, you can segment them into groups and tailor your marketing to each group.
The 6 Customer Segments
| Segment | RFM Profile | % of Customers | Marketing Strategy |
|---|---|---|---|
| Champions | Recent, frequent, high spend | 5-10% | VIP treatment, early access, referral program |
| Loyal Customers | Frequent, good spend | 10-15% | Loyalty rewards, cross-sell, upsell |
| Potential Loyalists | Recent, moderate frequency | 15-20% | Nurture to increase frequency. Second purchase incentive. |
| At-Risk | Used to buy frequently, not recently | 10-15% | Win-back campaign. ‘We miss you’ + discount. |
| Can’t Lose Them | High spend historically, inactive now | 5-10% | Aggressive win-back. Personal outreach from founder. |
| Lost | Long time ago, infrequent, low spend | 30-40% | Low-priority. Occasional re-engagement email only. |
Step-by-Step: RFM in Google Sheets
Step 1: Export Customer Data from Shopify
- Go to Shopify Admin → Customers → Export all customers
- You need: customer email, last order date, total orders, total spent
- Open in Google Sheets
Step 2: Score Recency (1-5)
- Sort by last order date
- Divide into 5 equal groups (quintiles)
- Score 5 = most recent (ordered in last 30 days)
- Score 1 = least recent (ordered 6+ months ago)
Step 3: Score Frequency (1-5)
- Sort by total orders
- Divide into 5 equal groups
- Score 5 = highest frequency (5+ orders)
- Score 1 = lowest frequency (1 order)
Step 4: Score Monetary (1-5)
- Sort by total spent
- Divide into 5 equal groups
- Score 5 = highest spend (top 20%)
- Score 1 = lowest spend (bottom 20%)
Step 5: Combine Scores and Segment
- Concatenate R, F, M scores: a customer with R=5, F=4, M=5 is ‘545’
- Map to segments using the table above
- Champions: scores like 555, 545, 554
- Lost: scores like 111, 112, 121
What to Do With Each Segment
Champions (5-10% of customers, 25-40% of revenue)
- Send personal thank you from the founder
- Early access to new products (before anyone else)
- Exclusive WhatsApp group for feedback and previews
- Referral program with meaningful incentives
- NEVER send discount offers to champions — they buy at full price
At-Risk Customers (10-15%, declining engagement)
- Win-back email sequence: ‘We noticed you haven’t shopped with us recently’
- Offer 15-20% ‘come back’ discount
- Show them what’s new since their last purchase
- WhatsApp message from a real person (not automated) for high-value at-risk customers
Lost Customers (30-40%, long inactive)
- Low-effort re-engagement: quarterly email with best-sellers
- Don’t spend heavily on win-back for this segment
- Clean from active email list after 6 months of no engagement (improves deliverability)
Need Help With Customer Segmentation?
At Growww Tech, we implement customer segmentation and retention strategies for D2C brands. Let’s unlock your customer data.
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