Recency, Frequency, and Monetary Value (RFM)

Overview:

XYZ Inc. would like to learn more about its customers’ profitability based on the

historical sales information available in 2019. XYZ wants to use the Recency,

Frequency, and Monetary Value (RFM) business analytical technique. XYZ has 100

customers. Information provided is as follows:

1. Customer ID

2. Last purchase date

3. Number of purchases made in 2019

4. Total sales for each customer in 2019

For guidance on how the RFM technique works, go to page 114 of your test under

section 7.5d.1.

Instructions:

• Calculate the RFM value for each customer.

• Using the results, split the list and classify them as follows:

o Diamond – Top 20%

o Platinum – Next 20%

o Gold – Next 20%

o Questionable – Bottom 40%

• Show your calculations in the datasheet provided.

• Explain how the RFM value technique is helpful in learning about your

customers.

Requirements:

• Submit a Word and Excel document.

• Calculations using excel.

• A short report summarizing the results.

ACC535 – Customer Relationship

Management

Recency, Frequency, and Monetary Value (RFM)

Be sure to read the criteria below by which your work will be evaluated before

you write and again after you write.

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