Integrating Cluster Analyses to Segment Customers, Products, and Services
As discussed in Chapter 3, “Developing an Effective Pricing Strategy,” advanced analytics support key elements of customer needs analysis and attribute clustering, helping to pair the right products with the right customers. These analytic techniques provide a thorough, reliable mechanism to analyze key customer attributes that should not be left to intuition or chance. Cluster analysis combines buyers, products, or services into relevant categories with the goal of differentiating how a company serves them. Organizations seeking to improve profits can often do so by:
- shifting customers from a lower-margin product to a higher-margin one within the same cluster
- targeting similarly clustered customers for high-profit offerings
- pairing higher- and lower-profit services in the same cluster.
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