Machine Learning

Behavior Clusters

The Behavior Clusters model groups users in homogeneous groups based on their buying behavior. This model generates a set of cluster IDs and cluster names, and assigns scored users to individual clusters.

Use cases

Audience selection optimization

  • Create a VIP program with your best customers, reward them with special offers, and make them ambassadors of your brand.

  • Reach out to customers who actively seek discounts with aggressive offers in case of an excess in inventory. However, you must not cannibalize margins by reactivating such customers and ensure that you exclude them from loyalty programs.

Marketing strategy design

Structure your programs better by defining personas. Clustering offers dimensionality reduction as you have to define your messaging for few customers and not millions.

Target audience

The Behavior Clusters model predicts the behavior of buyers.

  • A buyer is a customer with a transaction in the past three years.

  • The two+ time buyers are assigned a cluster.

  • The system does not consider one time buyers for clustering and assigns them a label.

How does the model work?

For each contact, the model calculates the purchase behavior features such as lifetime value, recency, frequency, and AOV.

Clusters are assigned different cluster names based on the exhibited purchase behavior features. For example, a high lifetime order value indicates that the customer is a VIP, and a medium order value with high average discount indicates that the customer is a discount seeker.

The model binds historical data multiple times using a range of values for clusters. It also generates various graphs and metrics, and uses them to determine the clusters that can be used for scoring. The goal is to have stable and meaningful clusters that exhibit reasonable statistical differences in the purchase behavior.

CDP displays the name of the assigned clusters in the user interface.

Using the Behavior Clusters model

CDP displays the cluster names in:

  • 360 > 360 Profiles

  • Actions > Campaigns and Actions > Campaigns+

  • Analytics > Metrics

To learn more about how the Behavior Clusters model can enhance your marketing workflow, contact us.