Consumer Behavioral Segmentation Analysis

Businesses find it more difficult to determine the customer lifetime value (CLV) of each individual client as more customers make purchases online. In this study, customer segmentation is used to determine the customer lifetime value for a UK-based registered firm that provides unique gifts. First, based on the ”Recency,” ”Frequency,” and ”Monetary” elements of purchasing variables, customer segmentation is conducted. The factors are then prioritized or given weight. In order to help marketers use these CLV values when making sales and marketing choices, the dataset is then separated into a number of clusters, each of which is ranked according to its CLV value. According to their worth and behavior, clients are divided into several categories using this process. RFM assesses the worth of a client by looking at how recently they made a purchase, how frequently they make purchases, and how much they spend on each transaction. CLV determines the expected profitability of a consumer over the course of their lifetime. Businesses may better understand their consumer base and develop focused marketing strategies to improve customer engagement and retention by combining these two methods.