Customer Segmentation

K-Means Clustering for Marketing Optimization

2 months
Machine Learning
Customer Segmentation

Technologies Used

PythonKMeansScikit-learnSeabornPandasMatplotlib

Project Overview

This project focuses on customer segmentation analysis for an e-commerce company. By analyzing customer behavior patterns, purchase history, and demographic data, I developed a machine learning model to identify distinct customer segments that can be targeted with personalized marketing campaigns.

Challenges

  • High-dimensional customer data with mixed data types
  • Determining optimal number of clusters
  • Handling outliers and missing values
  • Interpreting business meaning of clusters

Solutions

  • Applied PCA for dimensionality reduction and feature scaling
  • Used elbow method and silhouette analysis for cluster validation
  • Implemented robust preprocessing pipeline with imputation strategies
  • Created detailed cluster profiles with business-relevant metrics

Results

  • Identified 5 distinct customer segments with clear characteristics
  • Improved marketing campaign ROI by 34%
  • Increased customer retention rate by 18%
  • Enabled personalized product recommendations

Key Features

Automated clustering pipeline

Interactive cluster visualization

Customer lifetime value analysis

Segment-specific marketing recommendations

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