Typically, an organization’s best customers are those with the highest overall transaction value, frequency, and recency. Recency is a great metric for trigger-based communications such as setting a trigger for a campaign, a call center engagement, etc. For example, if a customer’s recency dips below X, trigger a “checking in” email.
Of course, it is important to make sure this type of metric is relevant to your business model. If your business involves customers returning to make purchases, such as e-commerce or adding premium features, then Transaction Recency can be a great indicator of how well and often you are able to bring about additional or repeat purchases from customers. If your business uses a subscription billing model, then the metric might default to either 30 days or one year, based on whether you bill your customers monthly or annually, and might not be the most relevant metric. In such cases, use metrics such as Activation Rate instead to measure customer loyalty.
.jpg)