Q20
We have done an RFM analysis on our customer data. Mary Jones has a score of "1 1 5". This series means that Mary ________ .
A.
Has ordered recently, orders frequently, and places a large order when she orders.
B.
Hasn't ordered recently, orders infrequently, but places a large order when she orders.
AnswerC.
Has ordered recently, orders frequently, but doesn't place a large order when she orders
D.
Hasn't ordered recently, orders infrequently, and doesn't place a large order when she orders.
Answer: Option B
Solution
Answer: Option B
Solution:
RFM analysis is a marketing technique used to evaluate and categorize a customer’s behavior based on three factors: R (Recency): How recently the customer has made a purchase.
F (Frequency): How often the customer makes a purchase.
M (Monetary): How much money the customer spends when they make a purchase.
Each factor is typically scored on a scale from 1 to 5, where:
1 indicates the lowest or worst performance, and 5 indicates the highest or best performance.
In Mary’s case, her RFM score is "1 1 5":
R = 1 → She hasn’t ordered recently.
F = 1 → She orders infrequently.
M = 5 → When she does order, she spends a large amount.
Therefore, Mary is classified as someone who hasn’t ordered recently, orders rarely, but places large orders when she does.