Analytics & Testing

RFM Analysis: How to Segment Ecommerce Customers by Recency, Frequency and Monetary Value

RFM analysis groups your customers by three things: how recently they bought (recency), how often they buy (frequency) and how much they spend (monetary value). You give every customer a score for each one, combine the scores and get groups like Champions, Loyal, At risk and Inactive. Then you send each group something different, instead of sending the same email to everyone.

Most ecommerce brands treat every customer the same.

Same campaigns. Same discounts. Same timing.

But a customer who bought three times in the last six months and a customer who bought once two years ago need completely different emails.

RFM analysis is one of the simplest ways to see the difference. Here's how it works, how to run it and how we'd use each group.

By Emiel Dingemans, Founder of Magicianly

Updated October 2026

What Is RFM Analysis?

RFM stands for recency, frequency and monetary value. RFM analysis scores each customer on those three things, based on their order history:

Recency: how long ago they last bought.
Frequency: how many times they've bought.
Monetary value: how much they've spent in total.

Customers who bought recently, buy often and spend a lot are your best customers. Customers who haven't bought in a long time, bought once and spent little are the least likely to come back.

Everyone else sits somewhere in between. That's where RFM is most useful.

Why Does RFM Analysis Matter for Retention?

Because different customers need different messages, and some need no discount at all.

Your best customers will usually buy at full price. Give them a discount and you mostly give away margin, which hurts your contribution margin. Customers who are drifting away might need a reason to come back. New customers need a second purchase.

RFM tells you who is who, so you can make those decisions on purpose instead of sending one campaign to your full list.

How Do RFM Scores Work?

Each customer gets a score for recency, frequency and monetary value. Higher is better.

Klaviyo uses a scale of 1 to 3 for each one. Some brands use 1 to 5. A smaller scale gives you fewer groups, which is easier to actually act on.

Put the three scores together and you get an RFM code, always in the same order: recency, frequency, monetary.

For example, a customer who:

bought 40 days ago (recency score 3);
has placed 5 orders, more than most of your customers (frequency score 3);
has spent more than most of your customers (monetary score 3);

gets the code 333. That's one of your Champions.

A customer who last bought two years ago, once, for a small amount, gets 111.

How Do You Do an RFM Analysis?

Here's the process, whether you use a tool or a spreadsheet:

Export your order data. For each customer: their order dates and order values. Leave out free orders.
Pick a time frame. For example, the last two years of orders.
Score recency. Set thresholds based on how often your customers normally buy. Your average time between orders is a good place to start.
Score frequency. Split customers into thirds by number of orders. The top third gets a 3, the middle third a 2 and the bottom third a 1.
Score monetary value. Do the same with total spend.
Combine the scores into groups. Six groups is plenty.
Decide what each group gets. Different content, offers and timing per group.
Re-run it regularly. Customers move between groups all the time, so a one-off analysis goes stale fast.

What Are the Main RFM Segments?

These are the six groups Klaviyo uses, with the score codes that fall into each (Klaviyo Help Center):

Group	RFM codes	Who they are
Champions	333, 332, 323	Bought recently, buy often and spend the most
Loyal	321, 322, 331, 232, 233	Buy repeatedly and bought fairly recently
Recent	312, 313, 311, 222, 223	Bought recently, but don't buy often yet
Needs attention	213, 221, 123, 132, 133	Spent a lot or bought often in the past, but not recently
At risk	231, 212, 122, 131, 211	Haven't bought recently and have a low or medium spend
Inactive	111, 112, 113, 121	Bought rarely and haven't bought in a long time

What Should You Send Each RFM Segment?

Here's how we'd treat each group:

Champions: early access, new launches and your best content. No discount. They'd buy anyway. Klaviyo's own suggestions include rewards or coupons for this group. We'd skip the coupons. Here's how we build a VIP customer flow.
Loyal: cross-sells based on what they already bought, restock reminders and recognition for their loyalty. Here's how a Klaviyo cross-sell flow works.
Recent: everything that gets a second order. The step from first to second purchase is where most of your future revenue is decided.
Needs attention: new products, personal recommendations based on past orders, and reasons to come back before they slip further.
At risk: a winback with a reason to return, and not too many emails. Here's how we set up a Klaviyo winback flow.
Inactive: one last winback attempt. If they don't respond and don't engage with your emails either, stop paying to email them. Here's when to use a sunset flow vs a winback flow.

How Do You Run RFM Analysis in Klaviyo?

Klaviyo has a built-in RFM analysis report. It's part of Klaviyo's paid Advanced KDP and Personalization subscriptions, not the standard plan (Klaviyo Help Center).

To use it, your account needs:

at least 500 customers who have placed an order;
an ecommerce integration, or orders sent through the API;
at least 180 days of order history, with orders in the last 30 days;
some customers with 3 or more orders.

By default, Klaviyo gives a recency score of 3 to customers who bought in the last 180 days, 2 to customers who last bought 181 to 365 days ago, and 1 to everyone before that. Frequency and monetary scores are based on thirds of your customers. You can change these thresholds.

We'd check the recency defaults first. If your customers normally reorder every month, 180 days is far too long to still count as recent.

Every profile gets a current RFM group, a previous RFM group and the date the group last changed. Klaviyo updates them every night. You can build segments on those properties and trigger flows when someone moves into a group, like At risk.

Can You Do RFM Segmentation in Klaviyo Without the RFM Report?

Yes. You can build the same logic with standard Klaviyo segments. These are the purchase-based segments we use for clients:

First-time buyers (frequency): placed order equals 1 over all time.
Returning customers (frequency): placed order at least 2 times over all time.
VIPs (frequency or monetary): for example, placed order at least 4 times over all time, or a total spend of three to four times your AOV. Set the numbers from your own data.
Winback (recency): placed order at least once in the last 6 months, but zero times in the last 90 days.
Non-buyers: placed order zero times over all time.

It's less precise than a scored model, but it covers the decisions that matter most: who needs a second purchase, who shouldn't get a discount and who is slipping away.

What Are the Limits of RFM Analysis?

RFM is useful, but it has blind spots:

It only looks backward. It tells you what customers did, not what they'll do next.
It ignores engagement. A Champion who stopped opening your emails and a Champion who reads every one get the same score. Combine RFM with your engaged segments.
Monetary value is revenue, not profit. A customer who only buys on discount can score high on spend and still be worth less to you.
More groups isn't better. Hyper-specific segments that each hold a few hundred people don't make money. Keep the groups big enough to send to.

What's the Difference Between RFM Analysis and Predictive Analytics?

RFM describes what customers have already done. Predictive analytics estimates what they'll do next, like when they'll order again, how likely they are to churn and how much they'll spend in the future.

They work well together. RFM tells you where a customer is today. Predictions tell you where they're heading. Here's how we use Klaviyo predictive analytics.

So How Should You Use RFM Analysis?

Score every customer on recency, frequency and monetary value, and combine the scores into a small number of groups.
Set recency thresholds based on how often your customers normally buy, not on default numbers.
Use the groups to decide who gets what: no discounts for Champions, a second purchase push for Recent customers, a winback for At risk customers.
In Klaviyo, use the RFM report if you have it, or build the same logic with purchase-based segments.
Combine RFM with engagement, and keep your groups big enough to send to.

The point of RFM isn't the score. It's sending the right thing to the right customer.

Frequently Asked Questions

What is RFM analysis?

RFM analysis is a way to group customers by recency (how recently they bought), frequency (how often they buy) and monetary value (how much they spend). Each customer gets a score for all three, and the combined scores put them into groups you can market to differently.

What does RFM stand for?

RFM stands for recency, frequency and monetary value. Recency is how long ago a customer last bought, frequency is how many times they've bought and monetary value is how much they've spent in total.

How do you calculate an RFM score?

Score each customer on recency, frequency and monetary value, for example from 1 to 3, where higher is better. Recency thresholds are based on days since the last order, and frequency and monetary scores are often based on splitting your customers into thirds. The three scores together form a code, such as 333 for your best customers.

What are the RFM segments?

Klaviyo uses six groups: Champions, Loyal, Recent, Needs attention, At risk and Inactive. Champions bought recently, buy often and spend the most, while Inactive customers bought rarely and haven't bought in a long time.

Does Klaviyo have RFM analysis?

Yes. Klaviyo has an RFM analysis report as part of its paid Advanced KDP and Personalization subscriptions. It needs at least 500 customers who have placed an order, at least 180 days of order history with orders in the last 30 days, and some customers with 3 or more orders.

How should you use RFM segments in email marketing?

Send each group something different. Give Champions early access instead of discounts, push Recent customers toward a second purchase, send cross-sells to Loyal customers and use a winback for At risk customers. Combine RFM with your engaged segments so you only email people who still engage.

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