How RFM Segmentation in Klaviyo Added 18% to Our Client's AOV

4 June

Most eCommerce brands have a flat Average Order Value. They also have a Klaviyo account full of segments they never use. The two problems are related.

We recently worked with a seven-figure apparel brand facing this exact issue. They had good traffic and a decent conversion rate, but their AOV was stuck at $85. They couldn’t get it to move.

In 90 days, we lifted their AOV by 18% to over $100. We did it by deleting most of their old segments and building five that actually tracked customer behaviour. This is how we did it.

The client’s initial segmentation approach and its limitations

When we first looked at this client’s Klaviyo account, it was a familiar sight. They were a successful Shopify brand with a solid product line. But their email marketing was built on a foundation from 2019.

Their segmentation was basic. They had a main newsletter list, a segment for ‘everyone who has purchased’, and maybe one for ‘purchased in the last 30 days’.

This meant almost everyone received the same campaigns. A first-time buyer who spent $50 got the same emails as a loyal customer who had spent $2,000 over ten orders. This is a massive, missed opportunity.

This one-size-fits-all approach has clear limits. - No personalisation: You can’t speak to a customer’s specific journey. - Missed revenue: You can’t effectively upsell or cross-sell when you don’t know who to target. - Inefficient messaging: You risk annoying your best customers with generic discounts while failing to re-engage those who are drifting away.

The core problem was clear. Their email strategy was designed to get a purchase, not to increase the value of each purchase. Despite having all the data in Shopify and Klaviyo, they weren’t using it to understand customer value. This is a common trap. Many brands think more segments are the answer, but the truth is that a few, smarter segments are far more effective. Why More Klaviyo Segments Don’t Always Mean More Revenue is a topic I’ve written about before.

Their flat AOV was a symptom of this generic approach. It was stuck, and they needed a new way to target customers based on their actual buying behaviour.

Implementing advanced Klaviyo RFM segmentation

Instead of creating dozens of hyper-specific but low-impact segments, we focused on one powerful model: RFM.

RFM stands for Recency, Frequency, and Monetary. It’s a framework for analysing customer value based on three key data points. It’s superior to basic segmentation because it doesn’t just look at what a customer did once. It looks at their entire purchasing pattern.

This gives you a much clearer picture of who your best customers are, who needs a nudge, and who is about to churn.

Understanding Recency, Frequency, Monetary (RFM) in eCommerce

Let’s break down the three parts.

Recency: How recently did a customer make a purchase? A customer who bought last week is more engaged than one who bought last year. This is the single biggest predictor of their likelihood to buy again.

Frequency: How often do they purchase? Someone who has bought five times is more valuable than a one-time buyer, even if their total spend is similar.

Monetary: How much have they spent in total? This identifies your big spenders.

When you combine these three metrics, you get a complete view of customer health. A customer with high scores in all three categories is a champion. A customer with high frequency and monetary value but falling recency is a valuable customer you are at risk of losing.

Setting up RFM properties and segments in Klaviyo

The first step was to translate this model into Klaviyo. We created a series of custom properties on each customer profile to store their RFM data. This involved pulling order history from Shopify and calculating each customer’s recency, frequency, and monetary values.

With the data in place, we built five core RFM segments. The exact definitions vary for every business, but for this apparel client, they looked like this:

Champions: Purchased in the last 45 days, have more than 5 orders, and a lifetime spend over $750. These are your best customers.
Loyal Customers: Purchased in the last 90 days, have 2-4 orders. The backbone of the business.
Promising Newcomers: Made their first purchase in the last 30 days. High potential, need nurturing.
At-Risk: Last purchase was between 91-180 days ago, but they were previously Loyal or Champions. We need to win them back.
Hibernating: Haven’t purchased in over 180 days. The hardest to re-engage.

The main challenge was ensuring data integrity. We had to clean up some historical order data from Shopify to make sure our RFM scores were accurate. This is a critical step that many overlook. Getting this technical setup right is a core part of our Klaviyo management for clients. If you’re unsure about the integrity of your own Klaviyo data or segment setup, a free Klaviyo audit can help identify areas for improvement. Once these segments were live, we could finally start sending the right message to the right person.

RFM-driven campaigns and flows for AOV growth

With our new RFM segments in place, we could redesign the client’s email strategy. The goal for every campaign was no longer just to get a click or a conversion. It was to increase the value of that conversion.

We built specific campaigns and automated flows for each of the key segments.

Targeted upsell and cross-sell campaigns

For the ‘Promising Newcomers’, the post-purchase flow was our first target. The old flow was a generic “thank you” email. We replaced it with a strategic sequence designed to secure a second, higher-value purchase.

If a customer bought a pair of running shorts, the new flow would showcase the matching technical shirt or running socks. We used Klaviyo’s dynamic product blocks to personalise these recommendations based on their first order. We also offered a small incentive, like free shipping on their next order over $100, to encourage a larger cart.

Re-engagement flows for at-risk segments

For the ‘At-Risk’ segment, the temptation is to send a steep discount. We avoided that. A simple “20% off” coupon often just encourages a small, low-margin purchase.

Instead, we built a re-engagement flow with tiered offers. The first email might highlight new arrivals related to their past purchases. If that didn’t work, a follow-up would offer a compelling, AOV-driving incentive: “Spend $120, get a free best-selling accessory”.

This structure does two things. It incentivises a return purchase, and it sets a minimum spend threshold that is higher than their previous AOV. We are explicitly asking them to spend more, but we’re giving them a clear reason to do so.

Exclusive offers for high-value customers

You should never discount to your ‘Champions’. It devalues your brand and trains your best customers to wait for sales. For this group, we focused on exclusivity and value.

We created VIP bundles that were only available to the ‘Champions’ and ‘Loyal Customers’ segments. These bundles combined three or four popular products for a price that was better than buying them separately, but still represented a high cart value of over $150.

We also gave this group 48-hour early access to all new product launches. This creates a sense of exclusivity and urgency, driving high-value purchases without any discounts. The results we see from these kinds of targeted campaigns are consistently strong, as shown across more of our results.

Measuring the impact of Klaviyo RFM segmentation

Building a new strategy is one thing. Proving it works is another. We tracked performance meticulously to measure the direct impact on AOV and other key metrics.

Our North Star KPI was, of course, Average Order Value from email-attributed purchases. But we also monitored: - Customer Lifetime Value (CLV) by segment - Purchase Frequency - Segment Migration (e.g., Newcomers becoming Loyal)

We established a baseline by analysing the 90 days prior to our changes. The email-attributed AOV during this period was $85.12.

Then, we launched the new RFM-driven campaigns and flows. Over the next 90 days, we used Klaviyo’s analytics to track the performance of each new campaign. We built custom reports to isolate the AOV for customers within each of our five new segments. You can learn more about this process from Klaviyo’s guide to custom reports.

The results were immediate and clear.

The overall email-attributed AOV for the 90-day period rose to $100.44. That is an 18% increase from the baseline.

We also saw significant lifts in other areas. The CLV of customers in the ‘Champions’ segment increased by 22%. The conversion rate for the ‘At-Risk’ win-back flow was double that of the old generic discount campaign. This data-driven approach is fundamental to our process and ensures every decision is backed by real numbers.

The client was not only pleased with the revenue lift but also with the new level of insight they had. For the first time, they could clearly see who their best customers were and what marketing resonated with them.

Why sophisticated RFM segments in Klaviyo matter

The 18% AOV increase meant an additional $21,000 in monthly revenue for this client, without spending a dollar more on traffic acquisition. This is the power of working smarter with the customers you already have.

Moving beyond basic segmentation is critical for any eCommerce brand that wants to scale profitably. An RFM framework forces you to stop thinking about your email list as one monolithic group. It helps you understand that different customers are at different stages of their journey and require different conversations.

This deeper understanding is the foundation for more effective marketing across the board. The client is now using these same RFM segments to build custom and lookalike audiences on Meta, improving the efficiency of their ad spend.

The work isn’t finished. An RFM strategy is a living system. We continuously monitor how customers move between segments. Are we successfully converting ‘Newcomers’ into ‘Loyal Customers’? Is the ‘At-Risk’ segment shrinking? This data guides our ongoing testing and optimisation.

For brands stuck with a flat AOV, the answer often lies hidden within their Klaviyo data. It just needs a proper framework to unlock it. If you suspect your segmentation could be working harder, it might be time for a closer look. A free Klaviyo audit can often uncover these opportunities.

This kind of strategic segmentation is what separates a standard email program from one that actively grows the value of your customer base.

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