Customer-Segmentation

Customer segmentation is the process of dividing coustomer of any company into different groups where coustoumer of each group tends to have similar characteristics.

RFM-analysis

RFM (recency, frequency, monetary) analysis is a marketing technique used to understand customer by examining how recently a customer has purchased (recency), how often they purchase (frequency), and how much the customer spends (monetary).

Objective

• Maximize the value of each customer to the business and increase sales.
• Understand the customers needs and patterns.

Customers were divided into 5 cluster based on elbow method and Silhouette Coefficient Score.

Cluster 0=For some time they haven't transacted and had average frequency.
Cluster 1=It’s been a long time they haven't transacted and used to transact less.
Cluster 2=They transacted recently, do so often and spend more than other customers.
Cluster 3=They transacted recently,and have average frequency.
Cluster 4=It’s been a long time they haven't transacted but had average frequency.