Customer Purchase Frequency

Purchase frequency, which is part of the RFM analysis trilogy, can be defined as the number of times that a customer makes a purchase in a given period of time. This is a metric that can be calculated for a week, a month, 6 months or a year depending on the specific category that is being studied. Using purchase frequency in a manner that is beneficial to the business requires you to know the purchase frequency for the category and for your brand too.

Purchase frequency is a powerful predictor of response, but it is not as accurate as recency. A great exercise for direct marketers would be to compare response of a direct mailing or email with groups based on their recency and their frequency.

When you find that purchase frequency for your brand is lower than that of the category, you can interpret that the customer is spending their money with competition. Categories that have high levels of purchase frequency also lend themselves to high levels of attrition among customers.

Examples of purchase frequency

• A retailer can measure how often the customer walks into the store
• A hotel can measure the number of reservations in a year
• A bank can analyze the number of deposits made
• A telephone company can track the number of upgrades
• A distributor can count the number of purchases

To see our list of customer analysis examples and the top 10 customer metrics businesses should track visit our Customer Analysis Examples page.