As a marketer, you will find yourself working with data daily. You use this data to measure success and performance, which help interpret your marketing campaigns and budgeting, among other things. “A cluster analysis can be a data mining tool used to identify discreet groups of sales transactions, consumers, and other types of behaviors.” It can discover structures in data without explaining why they exist. To better position products and messaging, marketers use cluster analysis to develop segments. Large amounts of data can be grouped into similar sets. Once grouped into similar segments, marketers can use this information to make sound business decisions.
The advantages of Using a Cluster Analysis
Personalization and Targeting: You can share successful campaigns between individuals with similar characteristics, achieved using cluster algorithms because they can group consumers with similar traits and their likelihood to purchase.
Sales: A clustering analysis will help you identify the type of consumer buying a specific product.
Informed Decisions: Identify differences in the data, use this information to inform your marketing to target specific groups of consumers with a message that will resonate with them at the appropriate time.
Cluster analysis can be used to understand buyer behaviors and identify consumers with similar characteristics that you can use to position your message and make the best marketing strategy. You can also determine competitive sets within the markets by clustering products and brands. Use a cluster Analysis to identify the relationship between different data and create new segments based on those relationships. Cluster analysis is a quick and easy step that is best to use daily to get valuable insights and help with your business decisions.