Hands-On Data Science for Marketing

Segmenting customer base

We are going to briefly discuss how we can segment the customer base in this section. We are going to expand this concept and discuss further how we can utilize machine learning for customer segmentation in Chapter 9, Customer Lifetime Value, but this section will give you some basic ideas on what customer segmentation is and what it looks like.

In this section, we will be segmenting our customer base by Customer.Lifetime.Value and Months.Since.Policy.Inception. Feel free to try different features for segmenting the customer base. Let's first take a look at the following distribution of the Customer.Lifetime.Value column:

• Based on this information, we are going to define customers with a CLV higher than the median ...