Customer Demographics and Spending Behavior Analysis for Optimized Marketing Strategies
About this project
Business Problem:
The objective of this SQL project is to conduct a comprehensive cluster analysis of customer demographics and purchasing behavior for a specific company. The primary goal is to gain deep insights into the company's ideal customers, enabling the business to better understand their specific needs, behaviors, and concerns. By analyzing different customer segments, the company can tailor its products and marketing strategies accordingly. The project aims to identify the most dominant customer segments in terms of numbers and spending habits, optimizing marketing efforts and maximizing sales potential.
Research Questions:
What are the customer segments that represent the majority of the company's customers in terms of numbers and spending habits?
What are the most popular products for each of these customer segments?
What are the preferred shopping mediums (web, catalog, or store) for the customers of each of these segments?
What is the most successful campaign that returned the highest offer acceptance rate among customers of each segment?
What is the complaint rate of the customers in these segments?
To access the data processing, cleaning and analysis section of this project, check the full project report through this link: https://bit.ly/3CkoUDh
Research Insights:
Customer Segments: In Group 1, the majority of customers belong to the middle class, are married, have at least one child, hold undergraduate degrees, and fall within the age range of 30 to 55. On the other hand, in Group 2, the top spending customers with the highest spending in the past two years are primarily individuals who are either single or married without children, hold undergraduate degrees or higher (such as Masters or PhD), belong to a high-income class, and are aged 30 and above. These findings provide a clear understanding of the demographic characteristics that differentiate the two customer groups, which can guide targeted marketing strategies and product offerings to cater to their specific needs and preferences.
Product Popularity: Customers in Group 1 have shown a strong preference for the company's wine, spending a significant amount of $52,773 on wine alone in the past two years. This accounts for 51.78% of their total spending on products. Similarly, customers in Group 2 also favor wine, with an average of 48.38% of their overall spending allocated to this product. These findings highlight the importance of the company focusing on promoting and customizing its wine offerings in product lines and marketing campaigns, as it is the top choice for customers in both segments. 3. Shopping Preferences: Both Group 1 and Group 2 customers show a strong preference for shopping at the physical store compared to other shopping mediums. In Group 1, store purchases account for 46.02% of all purchase operations across different mediums. Similarly, in Group 2, the store is the preferred shopping medium, representing 42.72% of all purchase operations. These findings emphasize the significance of the physical store as the primary channel for both customer groups, highlighting the importance of maintaining and optimizing the in-store experience to cater to their preferences and maximize sales opportunities.
Campaign Success: Among customers in Group 1, Campaign 4 stood out as the most successful campaign, achieving an acceptance rate of 7.45%. On the other hand, among customers in Group 2, Campaign 5 emerged as the most successful, boasting the highest acceptance rate of 50.79%. These findings highlight the varying effectiveness of different campaigns across the two customer groups, indicating the need to tailor marketing strategies and messaging to better resonate with the preferences and interests of each group.
Complaint Rate: The analysis of the dataset reveals that both customer groups, representing the majority of the company's customers and top spenders, have recorded a complaint rate of zero percent. This indicates a high level of satisfaction among these customers with the company's services. It is encouraging to see that the efforts put into meeting customer needs and delivering quality service have yielded positive results, as reflected in the absence of complaints from these valuable customer segments.
Conclusion:
In conclusion, this SQL analysis provided valuable insights into the customer demographics and spending habits of the company. By identifying the most dominant customer segments and their preferences, the company can tailor its products and marketing strategies to optimize sales potential. The analysis highlighted the importance of understanding customer characteristics and behavior for effective targeting and personalized marketing. The findings can guide the company in developing strategies to attract and retain customers, maximize offer acceptance rates, and address customer complaints effectively.
