The definition of RFM in the analysis. Recency (R): How recently customers have made their purchases.(No of days b/w last and first purchase) Frequency (F): How often customers have made their purchases.(Total orders) Monetary (M): How much money customers have paid for their purchases.(Revenue Contributed)
A shop/mall/online shop is visited by thousands of customers for shoppping or window shopping. We can categorise them using ML application based on their frequencies of purchasing, contribution, or number of visits. Therefore the management could find some insights that allows them to target their product to the right people in the right way, rather than targeting their entire audience with a generic message
Assignment (Part – I)
Task:
• Identify potential customer segmentation using RFM Model and provide some meaningful insights from each segment.
• What decision company should take based on the data insights?
• Prepare a PPT slide for the demonstration of your data modelling work.
• Demonstrate your understanding of the data.
• Do EDA (Exploratory Data Analysis) and provide a summary
• Explain your data modelling approach.
• What sort of modelling & segmentation is best fit for this data?
• Please find out the customers who are 'champions', 'Potential customers' and 'need attention'