User 136 · Marketing · Customers · Segmentation Clustering
Executive Summary

Executive Summary

K-means customer segmentation summary

Total Customers
2216
Customer Segments
4
Variance Explained (%)
57.5
Highest-Value Segment
Premium
Top Segment Avg Spend ($)
1309.9
Budget Segment Avg Spend ($)
148.4
Most Responsive Segment
Premium
Top Campaign Accept Rate (%)
45
Analysis of 2216 customers identified 4 distinct behavioral personas. The 'Premium' segment is the highest-value group, averaging $1310 in total spend — 783% more than the lowest-value segment. K-means clustering explains 57.5% of total customer variance, confirming that these personas are statistically well-separated and actionable for targeting.
Interpretation

Analysis of 2216 customers identified 4 distinct behavioral personas. The 'Premium' segment is the highest-value group, averaging $1310 in total spend — 783% more than the lowest-value segment. K-means clustering explains 57.5% of total customer variance, confirming that these personas are statistically well-separated and actionable for targeting.

Data Table

Cluster Profile Summary

Average demographics and spend by customer segment

IncomeClusterRecencyMnt WinesMnt Meat ProductsNum Store Purchases
3.759e+04Budget4981.933.33.8
7.485e+04Premium49.5536.8452.68.3
7.332e+04Tier 148.2694.1316.78.6
5.958e+04Tier 250461191.47.9
Interpretation

Each row represents one customer persona with its average income, recency, and category spend. The 'Premium' segment has the highest average income ($74851) and wine spend ($537 over two years), making it the clearest premium target. Recency scores show how recently each segment purchased — lower values indicate more active customers.

Visualization

Average Total Spend by Segment

Average 2-year spend across all product categories per segment

Interpretation

The 'Premium' segment outspends all others, averaging $1310 across all product categories over two years. The gap between the top and bottom segments is $1162 — a 783% premium that justifies differentiated acquisition budgets per persona.

Visualization

Income Distribution by Segment

Household income spread within each customer cluster

Interpretation

The box plot reveals how cleanly household income separates customer segments. Across 2216 customers, the median income is $51382 but varies substantially by cluster. High overlap between cluster income ranges indicates that spending behavior — not income alone — drives cluster membership, underscoring the value of the multi-feature approach.

Visualization

Spend Category Correlations

Pearson correlations between product spend categories

Interpretation

The heatmap shows Pearson correlations between all spend categories. The strongest cross-category link is between Mnt Fish Products and Mnt Sweet Products (r = 0.58), suggesting these products are frequently bought by the same customers and form a natural bundle. Highly correlated pairs identify cross-sell opportunities where promoting one category to buyers of the other is likely to find a receptive audience.

Visualization

Purchase Channel Mix by Segment

Average purchases by channel (web, catalog, store) for each segment

Interpretation

Channel preferences differ markedly across segments, informing where to place promotional spend. The 'Tier 1' segment leads in in-store purchases, while other segments may prefer web or catalog channels. Matching campaign delivery channel to segment preference improves conversion rates and reduces wasted impressions.

Visualization

Income vs. Wine Spend by Segment

Scatter of household income vs. wine spend, colored by cluster

Interpretation

Each point is one customer; color indicates cluster membership. A clear diagonal separation between premium and budget clusters confirms that income and wine spend together are strong discriminators. Customers clustered in the upper-right quadrant (high income, high wine spend) represent the highest-lifetime-value cohort and the most viable target for premium campaigns.

Visualization

Campaign Acceptance Rate by Segment

Percentage of customers in each segment who accepted at least one campaign

Interpretation

Campaign acceptance rates show which segments are most responsive to promotional offers. The 'Premium' segment accepts campaigns at a 45% rate — 28.6 percentage points above the least responsive segment. Concentrating campaign budget on high-acceptance segments delivers better ROI than blanket campaigns across the entire customer base.

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