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Cluster Analysis - In this age of customer relationship management - or in the more familiar
world of just good, plain direct marketing - it is important to segment customers and
communicate with them in ways that resonate. These techniques are especially useful when
encountering very large data sets that contain many variables. Multivariate techniques like
cluster analysis can analyse multiple variables at once and can determine the complex
relationships that exist among the variables. For example, a multivariate analysis might look
at the interplay among income, education, geographic location and various groups,
transaction data or account activity. Cluster analysis has two primary steps. In the first step,
the analyst determines how many mutually exclusive groups exist. In the second step,
customers are assigned to one of the groups, based upon their factor scores. To refine and
confirm results, many statisticians will perform cluster analysis using both the factors created
in the initial factor analysis stage and the initial data variables themselves.
Anomaly Detection - An anomaly is a pattern that deviates from the expected or normal
result. Anomaly detection is locating patterns that do not behave as expected – it looks at
clues and compares attributes to discover out-of-the-ordinary patterns. Many times, there are
multiple anomalies in groups, not just single occurrences. There are several different types of
anomalies: Point, Contextual, Collective, Simple anomaly detection. Anomaly detection
helps stakeholders throughout the organisation. Marketing managers can better predict future
consumer trends, operations managers are able to predict equipment purchasing needs and
maintenance failure, and C-suite leaders can better manage employee compensation, training
and incentive packages. On every front, anomaly detection combined with predictive
analytics changes the face of business
Regression Analysis is a set of statistical processes for estimating the relationships between
a dependent variable and one or more independent variables. The most common form of
regression analysis is linear regression, in which a researcher finds the line that most closely
fits the data according to a specific mathematical criterion. Regression analysis is widely used
for prediction and forecasting, where its use has substantial overlap with the field of machine
learning. Second, in some situation’s regression analysis can be used to infer causal
relationships between the independent and dependent variables. In CRM regression analysis
can be used for data harnessing, predicting activity, all sorts of events can be predicted using
the historical data in the CRM database, including likelihood of making contact at a specific
time of day and the probability of response to an email. Other numbers can be predicted from
regression analysis on CRM data, as well, including activities or contacts by salesperson,
response rates to campaigns or messages, and payment trends.

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