RFM Segmentation of Customers
Behavioral segmentation of customers of an online casino to tailor marketing efforts
Problem Statement
An Indian online casino wanted to understand their customers better and identify personalized marketing opportunities. A behavioral segmentation framework using the Recency-Frequency-Monetary Value technique was needed.
Challenges
- Siloed datasets requiring cleaning and transformation
- Pure RFM data was insufficient to adequately capture similarities and differences among customers
- Development of a segmentation refresh pipeline and knowledge transfer to non-technical stakeholders
Solution
Summary
I developed an unsupervised classification solution to identify clusters of customers with similar behavior and preferences. Each cluster was then profiled in detail and opportunities were identified for tailoring marketing strategies.
Approach
- Through extensive data assessment and hypotheses building, 53 behavioral metrics were identified for evaluation
- The customer universe was studied to identify which customers have sufficient behavioral data to be considered for segmentation
- Exploratory analyses and feature selection techniques helped in narrowing down the final list of 12 metrics used for segmentation
- k-means clustering was used to generate segments with additional discretionary refinement
- Each segment was profiled on dimensions of Recency, Frequency, Monetary Value and Preference
- Marketing and business opportunities tailored to each segment were identified
Deliverables
- Descriptive analysis and data exploration report
- Executive report on segmentation results
- On-premise ML pipeline setup for periodic refreshes
Exploration of Customer Universe
Split of Segments post Clustering
Segment Profiling
I couldn't be happier with the segmentation model delivered by Nanda. He crafted a solution that exceeded our expectations. The insights provided have significantly improved our marketing strategies, allowing us to target the right customers with the right bonuses.
Ishita Gandhi
Online Casino Marketer, India
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