Unsupervised Learning Framework for Customer Requisition and Behavioral Pattern Classification

Udoinyang G. Inyang, Okure O. Obot, Moses E. Ekpenyong and Aliu M. Bolanle

Modern Applied Science, 2017, vol. 11, issue 9, 151

Abstract: Maintaining healthy organization-customers relationship has positive influence on customers’ behavioral tendencies as regards preference to products and services, buying behavior, loyalty, satisfaction, and so on. To achieve this, an in-depth analysis of customers’ characteristics and purchasing behavioral trend is required. This paper proposes a hybrid unsupervised learning framework consisting of k-means algorithm and self-organizing maps (SOMs) for customer segmentation and behavior analysis. K-means algorithm was used to partition the entire input space of customers’ transaction dataset into 3 and 4 disjoint segments based on customers’ frequency (F) and monetary value (MV). SOM provided visualization of the underlying clusters and discovered customers’ relationships in the dataset. Interaction of F and MV clusters resulted in 12 sub-clusters. An in-depth analysis of each sub-cluster was also performed and appropriate customer relationship management (CRM) strategies established for each sub-cluster. Discovered knowledge will guide effective allocation of resources to each customer cluster and other organizational decision support functions much required by CRM systems.

Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ibn:masjnl:v:11:y:2017:i:9:p:151

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