Introduction

A large e-commerce company is gearing up for its biggest event for the year – its annual sale. The company is ambitious in its goals and aims to achieve the best sales figures so far, hoping for significant growth over last year's event. The marketing budget is the highest it has ever been. Naturally, marketing campaigns will be a critical factor in deciding the success of the event. From what we have learned so far, we know that for those campaigns to be most effective, an understanding of the customers and choosing the right messaging for them is critical.

In such a situation, well-performed customer segmentation can make all the difference and help maximize the ROI (Return on Investment) of marketing spend. By analyzing customer segments, the marketing team can carefully define strategies for each segment. But before investing precious resources into a customer segmentation project, data science teams, as well as business teams, need to answer a few key...