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Concepts and Terms: RFM Analytics

Frequency

Number of times a customer has transacted with your organization. Frequency is a powerful indicator of a positive future response because it shows the customers that have a strong affiliation with the organization. For example, customers who are familiar with the organization and who have responded frequently are very likely to respond positively to future marketing appeals.

Monetary

Individual or cumulative value of a customer's transactions with your organization. Monetary is a powerful indicator of a positive future response because it shows the customers that have made a commitment to the organization by making large transactions.

Population Query

Defines the population (contacts) used for RFM analyses. The Population Query references an IQA query that extracts users from an existing set. The Population Query requires using the Contact business object regardless of whether you reference multiple sources when defining the query.

Quintile

Any of the four values that divide the items of a frequency distribution into five classes with each containing one fifth of the total population.

RFM Administrator

Staff member who has permissions necessary for making changes throughout all aspects of the application, including setting up and administering RFM security and performing administrative functions such as purging inactive RFM models.

RFM Manager

Staff member who has permissions necessary for creating, editing, and deleting RFM models and definitions that they create (and other RFM models for which they are given access by a model's creator).

RFM User

Staff member who has read-only access.

Recency

Period of time (in days or months) that has elapsed since the last transaction between a customer and your organization. A customer who recently purchased from an organization and had a positive experience is more likely to respond favorably to the organization's marketing appeals than another customer who made a purchase in the distant past.

Transaction Query

Defines the transactions considered for RFM analysis. The Transaction Query references an IQA query and requires the following:

See Also

Understanding RFM Analytics

Key Features: RFM Analytics

Task Map: RFM Analytics

Defining RFM Analyses


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