Project : Customer Segmentation
Customer segmentation is the practice of dividing a company’s customers into groups that reflect similarity among customers in each group. The goal of segmenting customers is to decide how to relate to customers in each segment in order to maximize the value of each customer to the business. The Importance of Customer Segmentation Customer segmentation has the potential to allow marketers to address each customer in the most effective way. Using a large amount of data available on customers (and potential customers), a customer segmentation analysis allows marketers to identify discrete groups of customers with a high degree of accuracy based on demographic, behavioral, and other indicators. Since the marketer’s goal is usually to maximize the value (revenue and/or profit) from each customer, it is critical to know in advance how any particular marketing action will influence the customer. Ideally, such “action-centric” customer segmentation will not focus on the short-term va...