Worked Example: RFM Customer Segmentation Worked Example
Score customer cohorts using Recency (days), Frequency (orders), and Monetary value ($).
- Enter your operational, financial, or physical measurement inputs.
- Apply the standard domain equation: AvgInterval = TenureDays / PurchaseCount; P(Alive) ≈ 1 / [ 1 + (DaysSinceLastPurchase / AvgInterval)² ]; Expected12MoValue = P(Alive) × AnnualRunRate$.
- Review the primary result, sensitivity metrics, and 3 interactive SVG graphs.
Result: Calculates RFM Customer Segmentation via AvgInterval = TenureDays / PurchaseCount; P(Alive) ≈ 1 / [ 1 + (DaysSinceLastPurchase / AvgInterval)² ]; Expected12MoValue = P(Alive) × AnnualRunRate$.
Business & Marketing · E-Commerce & Unit Economics
RFM (Recency, Frequency, Monetary) Customer Score & Retention Probability Calculator: inputs, method, and how to read the result
Score customer cohorts using Recency (days), Frequency (orders), and Monetary value ($).
Choose inputs for the case you are checking
The defaults are illustrative. Replace them with values for your case and keep the units shown beside each field.
- Display Currency: Amounts are treated in the selected currency; no foreign-exchange conversion is applied.
- Days Since Last Purchase Recency: Days elapsed since the customer’s most recent order (Recency).
- Total Repeat Orders Frequency: Total historical orders placed by the customer (Frequency).
- Customer Tenure Days: Days since the customer’s very first order.
What the calculation includes
With the default values shown, Expected 12-Month Customer Value is USD 405.70. The calculation follows RFM Customer Segmentation Formula; the formula and variable definitions above show how the inputs combine.
One-input check: With the other defaults held constant, changing Days Since Last Purchase Recency from 35 days to 39 days changes Expected 12-Month Customer Value from USD 405.70 to USD 382.71. This is a comparison inside the calculator's stated model, not a prediction.
Where to use caution
- Uses industry-standard APICS/ASCM supply chain, lean manufacturing, and consumer physics formulas.
- Actual commercial freight tariffs, marketplace commissions, and utility rates vary by carrier and contract.
Scope: Global Supply Chain, Business & Consumer Standard Check the assumptions and limitations against your situation before relying on the estimate.
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