RFM segmentation of customers can be divided into 4 steps. The first step is to collect customer transaction data, the second step is to organize transaction data, the third step is to determine the RFM division dimensions and hierarchical standards, and the fourth step is to classify customer groups and determine management priorities.
The following mainly looks at the first and second steps:
1. Collect customer transaction data
The first step of the RFM customer segmentation model operation process is to collect customer transaction data. These data should include the customer’s unified ID number (such as the customer’s name on the cross-border e-commerce platform) and the corresponding name, transaction date and transaction amount. For cross-border e-commerce data collection, we need to pay attention to how to deal with those access data that are only browsed but not traded.
In addition, if the customer data obtained by the customer service staff is already an aggregated data package, it is necessary to ensure that the data contained includes the customer name, customer ID, the last transaction date and the total transaction amount.
2. Organize transaction data
After collecting the transaction data, that is, completing the first step of RFM analysis, we need to classify and organize these raw data. The data types include transaction date, customer ID and total transaction amount. However, we recommend sorting by customer ID (customer name) because the ultimate goal of RFM segmentation is to conduct targeted classification management of customers.