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Customer profiling, segmentation, and sales prediction using AI in direct marketing

Research Authors
Mahmoud SalahEldin Kasem, Mohamed Hamada, Islam Taj-Eddin
Research Date
Research Department
Research File
Research Journal
Neural Computing and Applications
Research Publisher
Springer Nature
Research Vol
36
Research Website
https://doi.org/10.1007/s00521-023-09339-6
Research Year
2024
Research_Pages
4995-5005
Research Abstract

In the current business environment, where the customer is the primary focus, effective communication between marketing and senior management is vital for success. Effective customer profiling is a cornerstone of strategic decision-making for digital start-ups seeking sustainable growth and customer satisfaction. This research investigates the clustering of customers based on recency, frequency, and monetary (RFM) analysis and employs validation metrics to derive optimal clusters. The K-means clustering algorithm, coupled with the Elbow method, Silhouette coefficient, and Gap Statistics
method, facilitates the identification of distinct customer segments. The study unveils three primary clusters with unique characteristics: new customers (Cluster A), best customers (Cluster B), and intermittent customers (Cluster C). For platform-based Edutech start-ups, Cluster A underscores the importance of tailored learning content and support, Cluster B emphasizes personalized incentives, and Cluster C suggests re-engagement strategies. By understanding and addressing the diverse needs of these clusters, digital start-ups can forge enduring connections, optimize customer engagement, and fuel
sustainable business growth.