Closed ColtAllen closed 4 months ago
I also have some ideas on a Bayesian clustering variant.
My recent experience with an RFM segmentation project led me to discover the effectiveness of utilizing jenks breaks methodology over simple percentile-based segmentation. I found Jenks breaks logic to offer more meaningful segmentations. I suggest considering Jenks breaks as it could potentially enhance the segmentation process. There is a C-based implementation that can be found here.
Hey @sarim-zafar,
Thanks for sharing. The Jenks Breaks methodology has some parallels with Dirichlet processes, which can be used to automatically infer the optimal number of clusters.
RFM Segmentation is a way to segment customers on their past purchasing behavior. This is a complementary technique to CLV/BTYD modeling as customers in different segments benefit from different marketing strategies, and would be a good bridge between combining MMM and CLV.
A traditional rules-based RFM segmentation would be a straightforward addition, and I also have some ideas on a Bayesian clustering variant.