Intermediate level · Module 2: Customer Analytics · Lesson 1 of 3
Customer Segmentation
Group customers by behaviour so each group gets the right attention.
In this lesson you will
- Segment customers by recency, frequency and value
- Design actions for each segment
Key concepts
segmentationrecencyfrequencymonetary value
The lesson
Recency (how recently a customer bought), frequency (how often) and monetary value (how much) are a simple, powerful way to segment customers.
Typical segments: loyal high-value customers to protect, new customers to welcome, lapsing customers to win back, and occasional low spenders.
Each segment needs a different action — and a metric to see if the action works.
Step by step
- Calculate recency, frequency and spend per customer.
- Score each from 1 to 3.
- Group customers into segments.
- Write an action for each segment.
Practice activity
Segment the shop's customers and propose actions.
Expected result: Four or five segments with sizes, values and actions.
Check your understanding
-
What do recency, frequency and monetary value measure?
Show answer
How recently, how often and how much a customer buys.
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Why segment customers?
Show answer
Different groups need different actions.
Taught live by an instructor — online or in person. Free course lessons are for self-study and do not lead to a certificate — see registration options.