01-28-2012 04:31 PM
I was asked the following question during an interview:
What method would you use to segment customers into high, medium and low value groups based on their purchase history of last one year?
I said using RFM(recency, frequency, monetary) method. The interviewer seemed unsatisfied with this answer.
Can I use cluser analysis? If so, how to do it? I can plug the data in and ask the program to produce 3 clusters. But these 3 clusters may not have anything to do with customer values.
Any other method? I think this is an unsupervised learning problem.
01-29-2012 05:55 PM
If the interviewer didn't respond at all to your answer, I would tend to think that they didn't understand the topic and were expecting a specific answer and figured that the question was sufficiently clear .. which I don't think it was!
However, if you want to learn about the things one might do with SAS to actually do customer segmentation analyses, I would suggest reading some of the available published materials. E.g., take a look at: https://support.sas.com/edu/schedules.html?id=1142