Thursday, 28 February 2013

Is RFM Model Outdated (Emergence of RFM+ Model)

Recency, Frequency and Monetary (RFM) is the standard model used by many retailers/banks and financial institutions to segment their customers. This model is a time-tested one and has never failed.

The RFM is slowly becoming outdated.

Emergence of Social media, Mobile devices has made the researchers to go with the RFM+ (RFMPlus Model). The RFMPlus includes social media information, Customer Lifetime Value (CLV), Last Visit / Latency / Frequency between visits.

1 comment:

  1. RFM model is a time-tested one. Extensions of RFM Model like RFMPlus might be similar to RFM only. The Location will be a major advantage for delivery of say a message etc, I doubt how it will be useful for analyzing the customer behavior


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