You know that feeling when you craft the perfect email, hit send, and... crickets? Ouch!

Your emails need to be relevant, contextual, and fit right into the journey a shopper undergoes for them to be effective.

• What stage of their purchasing journey are they in?
• When did they last interact with your brand?
• How often do they buy?
• When did they last buy?
• How much do they usually spend?

Sending generic, mass emails is no longer effective. There might be people on your list who love your brand, having bought several products already. There might also be people who just saw an ad on Instagram and subscribed to your list because you promised them some sweet, sweet discount.

To truly connect with your audience and drive conversions, you need to tailor your messages to individual preferences and behaviors. And, the best way to personalize your emails is to map them according to their journey using RFM analysis.

Note: You could use the things in this guide for your emails,sms, ads, push notifications, or anything, for that matter. But, we’ll focus on email in this piece.
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RFM + Email = $$$

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The purpose of email marketing is to get more repeat purchases over time. You need a way to send more emails to people without sending every single email to everyone on your list. The more someone gets email content that resonates with them, the more likely they are to buy from you.

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Recency tells you if they're still into you or if they've ghosted you.
Frequency shows if they're committed to your brand.
Monetary value reveals if they're a big spender or more price-sensitive.

Incorporating RFM segmentation into your email marketing strategy lets you do two things:

1. It lets you personalize your emails meaningfully
2. It helps you prioritize your email campaigns and focus your efforts on the customers who are most likely to respond positively.

When to Implement RFM Segmentation

Now, before you dive headfirst into your data, there are a few things to keep in mind. RFM works best when you keep a few things in mind:

High purchase frequency: RFM is especially effective when customers make purchases frequently. This allows for more granular segmentation based on recency and frequency, leading to highly targeted campaigns.
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Strong returning customer base: If your returning customers contribute significantly to your revenue, it makes them ideal candidates for personalized marketing efforts. By analyzing their RFM scores, you can tailor your campaigns to meet their specific needs and preferences.

Large Customer Base: If you’re only having a few thousand customers, your averages will be heavily skewed by outliers and will impact your decisions. Having a larger customer base will help you get more statistically significant data that will help you time your messages a whole lot better.

Sufficient historical data: You need to have enough historical data for RFM to be effective. Only then do meaningful patterns emerge. A larger dataset lets you create more granular customer segments, allowing you to create more effective campaigns.

Let’s put some hard numbers on these factors because high frequency and large customer base can mean different things to different people. Using RFM in email is particularly powerful when:

• The average purchase frequency is higher than 1.5 orders per customer
• Returning customers generate more than 40% of your total revenue
• You have more than 30,000 total customers
• You have at least 6 months of historical data

For smaller businesses, RFM can still be valuable for customer research and acquisition strategy, even if full implementation isn't feasible yet.

How to use RFM in your email marketing

RFM doesn't just segment your list; it reveals untapped opportunities. That "hibernating" segment? They're not dead weight - they're sleeping giants of potential revenue. Your high-value customers? They're ready to spend more if only you'd send them the right message. RFM helps you spot these opportunities and craft relevant messages that convert.

If you’re using a tool like Peel Insights, you’ll have your RFM segments readily available. The data gets automatically updated every time your customer or order count changes.

Personalized campaigns

When you segment your customers by their recency, frequency, and monetary values and personalizing your emails, you’re not just guessing; you’re serving tailored messages.

Here are some ways to do that:

Exclusive offers

Send special offers to your top RFM segments–champions, loyalists, and promising segments. Create a sense of exclusivity that rewards their loyalty and encourages continued high-value interactions.

Data collection campaigns

Create surveys to get valuable insights about specific customer groups as well as personal preferences. You can create multiple variations for your high-value customers and at-risk segments, making your questions relevant for each segment.

Win-back Campaigns

Win-back campaigns can be triggered for customers with low recency scores. Tailor messages to your at-risk customers and those about to become inactive, reminding them of your value proposition. You can also incentivize them with limited-period discounts.

Subscription pushes

You can strategically push your subscription offerings to customers with high F scores – promising and potential loyalist segments. For example, a coffee brand can use RFM to identify customers who have purchased approximately once a month for the past few months and send them an email asking them to purchase a monthly subscription–highlighting convenience and cost-savings.

We’ve written a more comprehensive guide (with tons of examples) on meaningful engagement with each of these segments. You should definitely check it out.
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Part 1

Part 2

Automation flows

RFM isn't just for one-off campaigns – it's a powerhouse for your automated email flows. Create conditional splits in your automation flows with RFM data to create a dynamic system that tailors messages to individual customers.

Here are some examples:

• Customize browse abandonment messages by adding discounts for at-risk customers
• Trigger win-back emails sooner than usual for high F-score segments
• A join the loyalty program flow for new enters to Loyals but have not joined your loyalty program
• Create a special offer for high-value customers in the Champion segment who have not purchased in over 30 days

Pro tips:

• Create advanced segments by drilling down into email revenue for each RFM segment. You can do this from your Peel Dashboard from the marketing attribution reports.
• Set up triggers in Klaviyo to email your fulfillment team to include a handwritten note for orders from champions and loyals.
• Create a conditional split based on a customer group’s recent browsing behaviors. For example, those in Champions, Loyal, or Recent get a regular browse abandonment message, while those in Needs Attention, Inactive, or At-Risk receive a browse abandonment message with an additional discount.

Ideas for email content personalization

If you’re using Klaviyo for your email marketing, create dynamic content for each segment in your email templates. You can use conditional statements to show/hide content based on RFM segments that you bring over to Klaviyo from Peel Insights.

Tailor product recommendations

You can recommend products based on the segment to show relevancy and maximize revenue:

• Champions/Loyal: Showcase premium products
• Low M-score segments: Showcase lower-value products
• Inactive/At-Risk: Feature entry-level products or previously bought products

Display discounts

Use discount codes in your abandonment flow only for groups like Needs Attention, Inactive, or At-Risk. The Champions and Loyal groups contain some of your best customers, that don’t always require discounts and are ready to pay full price.

This will help you avoid offering discounts to shoppers (champions or loyals) who’d have paid full price.

Include review requests

Your Champions or Loyal customers are highly likely to drop a 5-star review for their recent purchases. Include a review request section in emails sent to these segments.

Showcase loyalty points

You can also display content related to your loyalty program based on the customer's segment. For those in Champions, Loyal, Recent, and Needs Attention groups, show their tier or status. For those in Inactive or At Risk segments, explain your loyalty program and the value they will receive after purchases.

How to use Peel Insights for your email marketing

If you’re using Klaviyo for your email marketing, Peel Insights makes it absolutely easy for you to bring RFM into the mix. In fact, you can use a readily available report template to kick things off in no time.

Peel Insights offers a consolidated view of your customer data–you can access insights on post-purchase behavior, engagement rates, email performance, and revenue–letting you see the direct impact of emails across different RFM segments.

You can also create segments directly in your Klaviyo account from your Peel Insights Dashboard. You can then create segment-based conditional logic in your templates, flows, and campaigns.

Note: If you’re using Attentive for your SMS marketing, you can do the same things with Peel to power that as well.

Stand out in a crowded Inbox with RFM

As opposed to traditional email marketing that often follows a one-size-fits-all approach, RFM segmentation allows for a more nuanced, customer-centric strategy.

Implementing RFM segmentation isn't a one-and-done process. It requires continuous monitoring and optimization. As your business grows and customer behaviors change, your segmentation strategy should evolve too. As you refine your approach and leverage insights from RFM data, you’ll create dynamic email campaigns that cut through the noise and deliver real value to your audience. Remember, email marketing isn’t just about sending messages; it’s about fostering relationships.

So, dive into your data, experiment with your segments, and watch your email program ROI grow several-fold.

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