A Development of Customer Segmentation by Using Data Mining Technique

To Know customers is very important for the company to survive in its cut-throat competition among competitors. Companies need to manage the relationship with each and every customer, and make each of customers as profitable as possible. CRM (Customer relationship management) has emerged as a key solution for managing the profitable relationship. In order to achieve successful CRM customer segmentation is a essential component. Clustering as a data mining technique is very useful to build data-driven segmentation. This paper is concerned with building proper customer segmentation with introducing a credit card company case. Customer segmentation was built based only on transaction data which came from customer's activities. Two-step clustering approach which consists of k-means clustering and agglomerative clustering was applied for building a customer segmentation.