Definition #
Unsupervised learning techniques identifying high-value cohorts for targeted engagement.
Key Characteristics #
- RFM (Recency/Frequency/Monetary) analysis
- Lifetime value prediction
- Micro-segment discovery
- Churn risk tagging
Why It Matters #
Boosts campaign ROI by 35% through precise targeting (McKinsey).
Common Use Cases #
- Email campaign personalization
- Product recommendation engines
- Pricing tier optimization
Examples #
- Optimove
- Blueshift
- Dynamic Yield
FAQs #
Q: Cluster count determination?
A: Elbow method/Silhouette scores auto-select optimal groupings.
Q: Refresh frequency?
A: Monthly for stable markets, weekly during promotions/holidays.