| A step-by-step look at a powerful clustering and segmentation methodology. Customer clustering and segmentation are two of the most important data mining methodologies used in marketing and customer-relationship management. They use customer-purchase transaction data to track buying behavior and create strategic business initiatives. Businesses can use this data to divide customers into segments based on such "shareholder value" variables as current customer profitability, some measure of risk, a measure of the lifetime value of a customer, and retention probability. Creating customer segments based on such variables highlights obvious marketing opportunities. Mining Customer Data
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