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Customer Behavior Analysis and Segmentation

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This project utilizes SQL analytical functions to analyze customer behavior and segment customers based on their purchasing patterns. The project involves exploring a large retail dataset and extracting key insights to inform business decisions. After thorough analysis, the project implements a Monetary model to segment customers into distinct groups based on their Recency, Frequency, and Monetary values. The project also aims to answer additional questions related to customer behavior, such as identifying the longest streak of consecutive days a customer made purchases and calculating the average number of days or transactions it takes for a customer to reach a specific spending threshold.

Key Objectives

The key objectives of this project are:

  • To gain insights into customer behavior by analyzing the OnlineRetail dataset using SQL analytical functions.
  • To segment customers into different groups based on their Recency, Frequency, and Monetary values using the Monetary model.
  • To answer key business questions related to customer behavior, such as the revenue generated by each customer and the top products in terms of revenue.
  • To determine the maximum number of consecutive days a customer made purchases and the average number of days/transactions it takes a customer to reach a spending threshold.
  • To apply the Pareto principle to sales and determine whether a minority of customers are responsible for most sales.

Methodology

The project will follow the below methodology:

  1. Data Exploration: The OnlineRetail dataset will be explored using SQL analytical functions to answer the following key business questions:

    • What is the revenue generated by each customer?
    • What are the top products in terms of revenue?
    • What is the maximum number of consecutive days a customer made purchases?
    • What is the average number of days or transactions it takes for a customer to reach a specific spending threshold?

  2. Customer Segmentation: The Monetary model will be implemented to segment customers into different groups based on their Recency, Frequency, and Monetary values.

  3. Pareto Principle: The Pareto principle will be applied to sales data to determine whether a minority of customers are responsible for most sales.

Deliverables

The following deliverables will be provided at the end of the project:

  • A report summarizing the key findings of the project.
  • SQL scripts for all queries used in the project.