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IntermediateProject 2

Customer Segmentation Analysis

Group customers by behavior and demographics to create targeted marketing strategies

📋 Business Context

You're analyzing customer data for an e-commerce company. The marketing team wants to understand customer segments to create personalized campaigns and improve retention.

Total Customers
2,057
Total Revenue
$1.7M
Segments
5 Groups

Customer Segments

Distribution by Segment

12%
25%
50%
9%
High-Value Loyalists
Frequent Buyers
Occasional Shoppers
At-Risk Customers
Churned Customers

High-Value Loyalists

Customers:245
Avg Spend:$2850
Frequency:8.5x/yr

Frequent Buyers

Customers:512
Avg Spend:$850
Frequency:5.2x/yr

Occasional Shoppers

Customers:1024
Avg Spend:$320
Frequency:2.1x/yr

🎯 Strategic Insights

High-Value Focus

High-Value Loyalists represent only 12% of customers but generate 35% of revenue. Prioritize retention of this segment with VIP programs.

At-Risk Alert

187 previously high-value customers are at risk of churning. Immediate win-back campaigns could recover $224K in potential lost revenue.

Growth Opportunity

Occasional Shoppers (50% of base) could be converted to Frequent Buyers through targeted engagement, potentially doubling their lifetime value.

📋 Recommended Action Plan

1

Immediate: Launch At-Risk Win-Back Campaign

Email 187 at-risk customers with 20% discount + free shipping offer

2

This Month: Implement VIP Loyalty Program

Exclusive perks for High-Value Loyalists to increase retention

3

Ongoing: Occasional Shopper Engagement

Monthly email series with product education and limited-time offers