Recency is a method that predicts future customer behavior based on past customer behavior. This technique aims to determine how recently each customer has interacted with a business. It can be very useful in predicting future customer behavior if recency is measured using a well-chosen metric.
It has been proven repeatedly that recency is the best predictor of future customer behavior, out of the three RFM analysis factors, recency, frequency, and monetary. Recency analysis can be a valuable business asset if done correctly. If you want to take advantage of subscription-based services then visit http://cashicash.com/.
Recency analysis is a generic method that must be applied to every business context: customer lifecycle, product type, etc. This article will focus on subscription-based (or continuity), services. These services are provided by customers who continue to use the service, usually based on a contract. Examples include bank accounts, credit cards, and fixed and mobile telecommunications services.
These services are provided in highly competitive markets that have high customer switching rates (attrition, churn), which can lead to a decrease in profitability for those who use them.
In the case of continuity services, it is difficult to choose suitable measures for recency. Because a bank account or telephone subscription can be used every day, the 'last used' measurement cannot usually be used as a basis for recency.