Customers who have purchased more recently, more frequently, and have spent more money, are likelier to buy again. But those who haven't, are less valuable for the company and therefore, likely to churn.
RFM stands for
Recency - How recently did the customer purchase?
Frequency - How often do they purchase?
Monetary Value - How much do they spend?
By giving points, for various hierarchies you can easily find out who are your best customers.