Case Study: Customer Segmentation and Analysis for an E-commerce Company
Background:
ABC E-commerce is a growing online retail company with a diverse range of products.
The business analyst team wants to understand customer behavior and preferences to
optimize marketing strategies and improve customer satisfaction. The focus is on
segmenting customers based on their purchasing patterns.
Objectives:
Identify different customer segments based on their purchasing behavior.
Analyze the characteristics and preferences of each customer segment.
Provide insights to support targeted marketing campaigns.
Monitor customer trends over time.
Database Schema:
Assume there are two relevant tables in the database:
Orders:
OrderID (Primary Key)
CustomerID (Foreign Key)
ProductID (Foreign Key)
OrderDate
Quantity
TotalAmount
Customers:
CustomerID (Primary Key)
FirstName
LastName
Email
RegistrationDate
SQL Queries:
Identify High-Value Customers:
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SELECT CustomerID, COUNT(OrderID) AS OrderCount, SUM(TotalAmount) AS TotalSpent
FROM Orders
GROUP BY CustomerID
ORDER BY TotalSpent DESC
LIMIT 10; -- or any desired number
Calculate Average Order Value:
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SELECT AVG(TotalAmount) AS AvgOrderValue
FROM Orders;
Customer Segmentation (Assuming RFM Analysis):
RFM stands for Recency, Frequency, and Monetary. It is a technique for segmenting
customers based on these three dimensions.
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SELECT
CustomerID,
DATEDIFF(NOW(), MAX(OrderDate)) AS Recency,
COUNT(DISTINCT OrderID) AS Frequency,
SUM(TotalAmount) AS Monetary
FROM Orders
GROUP BY CustomerID;
Identify Active Customers:
For example, customers who made a purchase in the last 30 days.
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SELECT DISTINCT CustomerID
FROM Orders
WHERE OrderDate >= CURDATE() - INTERVAL 30 DAY;
Customer Preferences by Product Category:
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SELECT
CustomerID,
ProductCategory,
COUNT(OrderID) AS Purchases
FROM Orders o
JOIN Products p ON [Link] = [Link]
GROUP BY CustomerID, ProductCategory;
Customer Registration Trends:
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SELECT
DATE_FORMAT(RegistrationDate, '%Y-%m') AS RegistrationMonth,
COUNT(CustomerID) AS NewCustomers
FROM Customers
GROUP BY RegistrationMonth;
Customer Retention Rate:
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SELECT
YEAR(OrderDate) AS OrderYear,
COUNT(DISTINCT CustomerID) AS ReturningCustomers
FROM Orders
WHERE DATEDIFF(NOW(), OrderDate) > 365
GROUP BY OrderYear;
These SQL queries provide the business analyst with valuable insights into customer
behavior, preferences, and trends. The results can be used to guide marketing
strategies, personalize customer interactions, and improve overall business
performance.