A company's marketing department wants to do a promotional campaign next month. A data analyst on the team has been asked to perform customer segmentation, looking at how recently a customer bought…

The correct answer is D. Custer. This describes RFM (Recency, Frequency, Monetary) analysis, which is a form of cluster analysis. Cluster analysis groups customers into segments based on shared behavioral characteristics - in this case, how recently they purchased, how often, and how much they spent. It is not…

Data Analysis

Question

A company's marketing department wants to do a promotional campaign next month. A data analyst on the team has been asked to perform customer segmentation, looking at how recently a customer bought product, at what frequency, and at what value. Which of the following types of analysis would this practice be considered?

Options

APrescriptive
BTrend
CGap
DCuster

How the community answered

(45 responses)

A
7% (3)
B
4% (2)
C
18% (8)
D
71% (32)

Explanation

This describes RFM (Recency, Frequency, Monetary) analysis, which is a form of cluster analysis. Cluster analysis groups customers into segments based on shared behavioral characteristics - in this case, how recently they purchased, how often, and how much they spent. It is not prescriptive (which recommends actions), not trend analysis (which examines changes over time), and not gap analysis (which identifies the difference between current and desired performance). RFM-based customer segmentation is a classic marketing application of clustering.

Topics

#Customer segmentation#RFM analysis#Descriptive analytics#Cluster analysis

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