Creating client segments

Marketers can better target different audience subgroups with their marketing efforts by segmenting their audiences. Both product development and communications might be a part of those efforts. Segmentation benefits a business by allowing the following:

• Creating targeted marketing communication on the right communication channel for each client or user segment
• Applying the right pricing options to the right clients
• Concentrating on the most lucrative clients
• Providing better client service
• Promoting and cross-promoting other goods and services

In this section, we will be preprocessing the data to be able to apply clustering methods for customer segmentation. The steps that we will apply to preprocess the data are set out here:

• Encoding the categorical variables using a label encoder, which will transform them into numerical columns
• Scaling features using the standard scaler to normalize the values
• Applying principal...