Configuration and requirements for RFM Analysis

To start using RFM Analysis, it is essential to have purchase data linked to customer contacts. You can activate the analysis if:

• you have an active eCommerce integration (such as Shopify, Magento, or Prestashop connector).
• you have a custom integration that periodically synchronizes order history with magnews. To ensure an effective analysis, the data must include at least the order creation or update date, an order identifier, and the total amount.
• you do not have detailed order data but have aggregated data stored in contact fields, including at least the date of the last purchase, the number of purchases, and the total spending.

Getting started

After installing the app from Connect, go to Profile Studio, the dedicated database space.

From there, click on RFM Analysis, then select New model.

Assign a name to the model and specify where the purchase history data is stored:

• Contact fields, if your database already contains the three aggregated fields: last purchase date, number of purchases, and total spending.
• Data table, if detailed order data is stored in a separate table linked to the contact through a relationship field.

Once the model is created, you will be redirected to its home page, where you can complete the configuration and start the calculation.

Define target, data source, and scheduling

From the model's home page, in the main card, click on Settings to complete the configuration.

In the General tab, you can enable the model for calculation, edit its name, and define the target contacts for the analysis. For example, you can filter only contacts imported from Shopify or belonging to a specific database.

With the Count contacts button, you can check the target size in real time based on the applied filters.

In the Data source tab, complete the input data configuration:

• if you selected the Contact fields model, you need to specify the three required fields: last purchase date, number of purchases, and total spending.
• if you selected the Data table model, you must specify the field that links contacts to purchases. You can also set up a query to filter and include only specific orders.

Specifying a currency helps contextualize the total spending value for the Monetary dimension of the analysis.

Finally, in the Scheduling tab, you can activate periodic calculation to automatically update the RFM analysis. For example, you could schedule the update immediately after the order synchronization, ensuring that the data is always up to date.

Customize the thresholds for R, F, and M and configure the Clusters

As explained in the article What is RFM analysis and how can it influence your marketing strategy?, the goal of the analysis is to assign each contact a score from 1 to 5 for Recency (R), Frequency (F), and Monetary (M), along with a descriptive Cluster that summarizes their purchasing behavior.

Magnews saves the RFM analysis values in four fields, which you can find on the contact's home page, under the eCommerce tab. To identify the fields where the RFM values are stored, you can click the information icon next to the model's name.

Additionally, by enabling Business Insight mode in the RFM Cluster field, you will see the contact’s classification highlighted on their home page and the distribution of states in the database dashboard.

Customizing the Thresholds

RFM models come with predefined thresholds, but it is recommended to tailor them to the specific needs of your business to achieve more accurate segmentations.

To customize them, go to the model's home page and click on Configure clusters.

In the Recency, Frequency, and Monetary tabs, you can modify the reference thresholds for each score.

To simplify the input, the values must be entered in ascending order. However, the logic for Recency is the opposite of Frequency and Monetary:

• A low Recency value indicates that the contact has purchased recently, so they will receive a high score.
• A low Frequency and Monetary value indicates that the customer has purchased infrequently and spent little, so they will receive a low score.

Configuring the Clusters

In the Cluster tab, you can:

• Add a new cluster by clicking the + button.
• Delete a cluster by clicking the trash icon.
• Edit an existing cluster by clicking the pencil icon.

Each cluster can be customized with a name, description, color for charts, and RFM combination triplets.

Finally, you can sort the clusters and preview the assigned triplets directly from the list for a quick check.

We recommend manually starting the calculation after modifying, adding, or removing clusters to prevent inconsistencies in the RFM Cluster contact field and reports. These changes are applied only when the calculation is executed.

Starting manual and periodic calculation

As explained above, after enabling the model from the Settings button, you can specify a calculation frequency from the Scheduling tab.

However, it is also possible to start the calculation manually from the Calculation card by clicking on Start calculation now.

A scheduled task will be initiated as soon as possible to perform the calculation and assign values to the RFM fields and the Cluster field for the contacts defined in the model's target.

At the end of the calculation, you should see a new card showing a summary of the contact distribution across the clusters.

The Prospect cluster is not displayed in the chart to give more visibility to actual customers, but you can find it in the table next to it for a numerical reference on the total number of contacts.