CUSTOMER SEGMENTATION, CLUSTERING, AND PREDICTION WITH PYTHON
About this ebook
To ensure accurate analysis and modeling, we performed data preprocessing steps. This involved handling missing values, removing duplicates, and addressing any data quality issues that could impact the results. We also split the dataset into features (X) and the target variable (y) for prediction tasks. Since the dataset had features with different scales and units, we applied feature scaling techniques. This process standardized or normalized the data, ensuring that all features contributed equally to the analysis.
We then performed regression analysis on the "PURCHASESTRX" feature, which represents the number of purchase transactions made by customers. To begin the regression analysis, we first prepared the dataset by handling missing values, removing duplicates, and addressing any data quality issues. We then split the dataset into features (X) and the target variable (y), with "PURCHASESTRX" being the target variable for regression. We selected appropriate regression algorithms for modeling, such as Linear Regression, Random Forest, Naïve Bayes, KNN, Decision Trees, Support Vector, Ada Boost, Catboost, Gradient Boosting, Extreme Gradient Boosting, Light Gradient Boosting, and Multi-Layer Perceptron regressors. After training and evaluation, we analyzed the performance of the regression models. We examined the metrics to determine how accurately the models predicted the number of purchase transactions made by customers. A lower MAE and RMSE indicated better predictive performance, while a higher R2 score indicated a higher proportion of variance explained by the model. Based on the analysis, we provided insights and recommendations. These could include identifying factors that significantly influence the number of purchase transactions, understanding customer behavior patterns, or suggesting strategies to increase customer engagement and transaction frequency.
Next, we focused on customer segmentation using unsupervised machine learning techniques. K-means clustering algorithm was employed to group customers into distinct segments. The optimal number of clusters was determined using KElbowVisualizer. To gain insights into the clusters, we visualized them 3D space. Dimensionality PCA reduction technique wasused to plot the clusters on scatter plots or 3D plots, enabling us to understand their separations and distributions. We then interpreted the segments by analyzing their characteristics. This involved identifying the unique features that differentiated one segment from another. We also pinpointed the key attributes or behaviors that contributed most to the formation of each segment.
In addition to segmentation, we performed clusters prediction tasks using supervised machine learning techniques. Algorithms such as Logistic Regression, Random Forest, Naïve Bayes, KNN, Decision Trees, Support Vector, Ada Boost, Gradient Boosting, Extreme Gradient Boosting, Light Gradient Boosting, and Multi-Layer Perceptron Classifiers were chosen based on the specific problem. The models were trained on the training dataset and evaluated using the test dataset. To evaluate the performance of the prediction models, various metrics such as accuracy, precision, recall, F1-score, and ROC-AUC were utilized for classification tasks. Summarizing the findings and insights obtained from the analysis, we provided recommendations and actionable insights. These insights could be used for marketing strategies, product improvement, or customer retention initiatives.
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About the author
Vivian Siahaan is a fast-learner who likes to do new things. She was born, raised in Hinalang Bagasan, Balige, on the banks of Lake Toba, and completed high school education from SMAN 1 Balige. She started herself learning Java, Android, JavaScript, CSS, C ++, Python, R, Visual Basic, Visual C #, MATLAB, Mathematica, PHP, JSP, MySQL, SQL Server, Oracle, Access, and other programming languages. She studied programming from scratch, starting with the most basic syntax and logic, by building several simple and applicable GUI applications. Animation and games are fields of programming that are interests that she always wants to develop. Besides studying mathematical logic and programming, the author also has the pleasure of reading novels. Vivian Siahaan has written dozens of ebooks that have been published on Sparta Publisher: Data Structure with Java; Java Programming: Cookbook; C ++ Programming: Cookbook; C Programming For High Schools / Vocational Schools and Students; Java Programming for SMA / SMK; Java Tutorial: GUI, Graphics and Animation; Visual Basic Programming: From A to Z; Java Programming for Animation and Games; C # Programming for SMA / SMK and Students; MATLAB For Students and Researchers; Graphics in JavaScript: Quick Learning Series; JavaScript Image Processing Methods: From A to Z; Java GUI Case Study: AWT & Swing; Basic CSS and JavaScript; PHP / MySQL Programming: Cookbook; Visual Basic: Cookbook; C ++ Programming for High Schools / Vocational Schools and Students; Concepts and Practices of C ++; PHP / MySQL For Students; C # Programming: From A to Z; Visual Basic for SMA / SMK and Students; C # .NET and SQL Server for High School / Vocational School and Students. At the ANDI Yogyakarta publisher, Vivian Siahaan also wrote a number of books including: Python Programming Theory and Practice; Python GUI Programming; Python GUI and Database; Build From Zero School Database Management System In Python / MySQL; Database Management System in Python / MySQL; Python / MySQL For Management Systems of Criminal Track Record Database; Java / MySQL For Management Systems of Criminal Track Records Database; Database and Cryptography Using Java / MySQL; Build From Zero School Database Management System With Java / MySQL.
Rismon Hasiholan Sianipar was born in Pematang Siantar, in 1994. After graduating from SMAN 3 Pematang Siantar 3, the writer traveled to the city of Jogjakarta. In 1998 and 2001 the author completed his Bachelor of Engineering (S.T) and Master of Engineering (M.T) education in the Electrical Engineering of Gadjah Mada University, under the guidance of Prof. Dr. Adhi Soesanto and Prof. Dr. Thomas Sri Widodo, focusing on research on non-stationary signals by analyzing their energy using time-frequency maps. Because of its non-stationary nature, the distribution of signal energy becomes very dynamic on a time-frequency map. By mapping the distribution of energy in the time-frequency field using discrete wavelet transformations, one can design non-linear filters so that they can analyze the pattern of the data contained in it. In 2003, the author received a Monbukagakusho scholarship from the Japanese Government. In 2005 and 2008, he completed his Master of Engineering (M.Eng) and Doctor of Engineering (Dr.Eng) education at Yamaguchi University, under the guidance of Prof. Dr. Hidetoshi Miike. Both the master's thesis and his doctoral thesis, R.H. Sianipar combines SR-FHN (Stochastic Resonance Fitzhugh-Nagumo) filter strength with cryptosystem ECC (elliptic curve cryptography) 4096-bit both to suppress noise in digital images and digital video and maintain its authenticity. The results of this study have been documented in international scientific journals and officially patented in Japan. One of the patents was published in Japan with a registration number 2008-009549. He is active in collaborating with several universities and research institutions in Japan, particularly in the fields of cryptography, cryptanalysis and audio / image / video digital forensics. R.H. Sianipar also has experience in conducting code-breaking methods (cryptanalysis) on a number of intelligence data that are the object of research studies in Japan. R.H. Sianipar has a number of Japanese patents, and has written a number of national / international scientific articles, and dozens of national books. R.H. Sianipar has also participated in a number of workshops related to cryptography, cryptanalysis, digital watermarking, and digital forensics. In a number of workshops, R.H. Sianipar helps Prof. Hidetoshi Miike to create applications related to digital image / video processing, steganography, cryptography, watermarking, non-linear screening, intelligent descriptor-based computer vision, and others, which are used as training materials. Field of interest in the study of R.H. Sianipar is multimedia security, signal processing / digital image / video, cryptography, digital communication, digital forensics, and data compression / coding. Until now, R.H. Sianipar continues to develop applications related to analysis of signal, image, and digital video, both for research purposes and for commercial purposes based on the Python programming language, MATLAB, C ++, C, VB.NET, C # .NET, R, and Java.
