/Rfm-Analysis

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Rfm-Analysis

RFM (Recency, Frequency, Monetary) analysis is a behavior-based approach grouping customers into segments.

• It groups the customers on the basis of their previous purchase transactions.

• How recently, how often, and how much did a customer buy.

• RFM filters customers into various groups for the purpose of better service.

Recency (R): Who have purchased recently? Number of days since last purchase (least recency)

Frequency (F): Who has purchased frequently? It means the total number of purchases. ( high frequency)

Monetary Value(M): Who has high purchase amount? It means the total money customer spent (high monetary value).