What is eRFM?

Segmentation is a well-established tactic used by marketers to improve the relevancy of their marketing. Using customer data such as gender, location, interests, and dislikes, you can group audiences based on their similar traits.  

Customer engagement models like RFM enable marketers to segment audiences in more sophisticated ways. Using insights such as the recency, frequency, and monetary value of past purchases (RFM) enables you to identify customers who have the highest potential. But how do you know whether these shoppers are truly engaged? 

What is eRFM?

To determine whether a customer is truly engaged with your marketing efforts, you need to measure their engagement and interaction with your brand. That’s where eRFM comes in.  

Businesses use eRFM as a segmentation framework to categorize customers based on their previous behaviors and actions. To effectively use eRFM to segment customers, businesses need to collect and analyze customer data across the four metrics: engagement, recency, frequency, and monetary value.

eRFM: the future of segmentation

eRFM is the next level of RFM. As well as measuring the recency, frequency, and monetary value of past purchases, our customer modeling tool also looks at engagements like email opens and online activity. This means that you can segment customers based on their recent interactions with your brand, as well as their past purchase behavior.  

Each RFM persona receives an engagement score, so you can identify customers who are primed for conversion, and those who need to be re-engaged. By using eRFM, you can tailor your marketing campaigns, provide personalized experiences and boost customer retention.

Daily data syncing means that your segments will always remain up-to-date. As customer behaviors change, so will your segments. Identifying key moments in the customer journey is now easier than ever, you’ll never miss an opportunity to convert customers again.

Creating eRFM segments

RFM modeling creates seven personas that can be made into audience segments:

1. Non-customers: potential customers who have subscribed to your newsletter but haven’t made a purchase.  
2. Inactive: customers who have not made a purchase in a long time.  
3. Need nurturing: customers who are about to fall into the ‘inactive’ segment. 
4. High value: customers who have spent a lot with you, but have not shopped recently. 
5. Recent: shoppers who have been actively purchasing from you. 
6. Loyal: customers who shop with you frequently.  
7. Champions: shoppers who frequently spend a lot of money with your brand.  

With the addition of engagement insights, these personas are broken down further into four categories: 

1. Lightly engaged  
2. Engaged 
3. Highly engaged 
4. Most engaged  

This gives you a total of 28 audience groups to choose from when building your segments.  

How to use eRFM segments

With 28 segments to build, the possibilities are endless. Each customer can receive highly personalized and relevant messages depending on the journey stage they’re on. 

Here are just a couple of ways you can add eRFM segments into your day-to-day marketing automation strategy.  

1. Greet new website visitors

Making a good first impression on new customers is essential for growth. A strong pipeline of potential customers can guarantee your business’s future revenue. With more consumers shopping online than ever before, you must identify those yet to make a purchase so you can target them accordingly.  

Traditional RFM modeling doesn’t account for prospective customers expressing interest in your brand. eRFM allows you to target new subscribers who are browsing your website for the first time. You can identify these non-customers and enroll them in welcome or nurture programs to highlight your brand’s USPs.  

2. Discover critical first purchase intent

We know that shoppers today browse multiple bands before they’re ready to make a purchase. Increased competition online means you’re fighting more and more for their attention.

Using eRFM modeling, online behaviors are tracked, so you can easily identify shoppers who look ready to convert for the first time. Applying this to segment builder means you can deliver relevant and timely content that will help tip them over the edge. This is the perfect time to send readers information about your shipping or returns policy. 

3. Re-engage inactive customers

Inactive customers can be a huge source of opportunity. They’ve previously purchased from you but for whatever reason, you just haven’t seen them in a while. Our eRFM model makes it easy for you to identify inactive customers who are showing signs of re-engaging with your brand.  

You can target this segment with a timely win-back campaign that reminds them of your brand’s values or offers them a discount code on their next purchase. This may be the incentive they need to come back into the fold. 

4. Identify customers with active carts

Customers add items to their baskets for many reasons, but one thing is for sure: they’re considering purchasing these products. Maximize these clear signs of intent by acting quickly to close the sale.  

When your eRFM model surfaces customers with an active cart, you should be retargeting these shoppers with personalized product recommendations or exclusive offers. Product recommendations are proven to increase average order value, so are crucial for customers at this stage in their journey.  

5. Drive repeat purchases from existing customers

Retaining existing customers is 5x cheaper than acquiring new ones. To really tap into brand-new revenue opportunities, eRFM can surface customers showing signs of making a second purchase.  

You can use this clear intent to purchase to highlight unique aspects of your customer experience, such as your loyalty program. Collecting points per purchase or unlocking special rewards can drive shoppers to return time and time again.  

6. Maintain loyal customer engagement

Your most loyal customers are typically very low maintenance. You’ve already done the hard work showing them why you should be their go-to brand. They trust you and because of that, they’re happy to be advocates for your brand. But what do you do when their engagement starts to wane? 

By creating a segment based on this eRFM persona, you can enroll these shoppers in a customer care automation program to keep engagement levels high. This is the perfect segment to target with requests to complete focus group surveys.

As well as maintaining engagement, you can create a stronger relationship because these customers will feel directly connected to your brand. 

Adding eRFM to your segmentation strategy

eRFM segments are based on customer behaviors. For those marketers out there struggling to implement an effective segmentation strategy because of poor customer data, eRFM is the solution you didn’t know you were waiting for.  

eRFM pulls in data hiding in plain sight. There’s no need for extensive data cleansing or laborious preference collection. We use insights from your ecommerce platform to help you discover opportunities waiting to be turned into revenue-generating moments.