Customer segmentation

Different types of customers respond to different marketing/sales approaches and even product features. Being able to assign customers to segments allows strategies to be developed to target these customers in ways that will be meaningful to them and result in positive ROI without the need for custom strategies for each customer.

Overview

Identifying customer segments and assign customers to those segments can drive ROI for the business.

TARGET

What segment does the customer belong to?

Challenge

In order to adequately segment customers, it is necessary to develop a 360 degree view of the customer. This involves the massive task of aggregating and merging all information about the customer from across the company. This data may be owned by multiple different departments in the company with different identifiers. All this data needs to be cleaned, joined and transformed into valuable ML features before going into model training. This pre-modeling prep process can be frustrating and time consuming. We are here to help.

Modeling techniques and libraries

Clustering

When segments have not been identified for most or all of the customers, or when the company is looking to identify new segments within their customer base, clustering is the standard technique. Clustering uses the attributes of the customer to group customers into segments of similar customers that can then be used for marketing purposes or in a supervised learning process to build a way to quickly segment new customers.

Package: 
  • Sklearn

Machine learning analysis

If the company has already identified segments for some of the customers, these labeled customers can be used to build supervised models to predict the segment as a function of the independent variables. Use model interpretability packages to evaluate the impact of the independent variables on the prediction.

Packages:
  • Sklearn
  • ELI5
  • LIME
  • SHAP

Data features

# of Blogs Viewed
Web Analytics DB
Data Type
Continuous
Target
No
Yes
# of Pages per Session
Web Analytics DB
Data Type
Continuous
Target
No
Yes
# of Product Features Used
Product Analytics DB
Data Type
Continuous
Target
No
Yes
# of Product Features Used per Day
Product Analytics DB
Data Type
Continuous
Target
No
Yes
# of Videos Viewed
Web Analytics DB
Data Type
Continuous
Target
No
Yes
# of Website Sessions
Web Analytics DB
Data Type
Continuous
Target
No
Yes
# of Website Views
Web Analytics DB
Data Type
Continuous
Target
No
Yes
# of Whitepapers Viewed
Web Analytics DB
Data Type
Continuous
Target
No
Yes
Avg Sessions per Day
Product Analytics DB
Data Type
Continuous
Target
No
Yes
Avg Time per Session
Product Analytics DB
Data Type
Continuous
Target
No
Yes
Converted to Sale
CRM
Data Type
Binary
Target
No
Yes
Customer Age
CRM
Data Type
Continuous
Target
No
Yes

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