What is RFM (Recency, Frequency, Monetary) analysis?

RFM (Recency-Frequency-Monetary) analysis is a marketing technique used by businesses to analyze customer behavior patterns based on three primary metrics: recency (how recently has a customer purchased?), frequency (how often does the customer purchase?) and monetary value (how much does the customer spend per purchase?). By assessing these factors against each other companies can gain insight into what strategies will be most effective for engaging and retaining customers.