Insights to Actions: Marketing Plan
Standard spender (Cluster 0 - Red):
Medium Income, Medium Spending Score
Marketing Plan: Regularly update these customers about new products, seasonal collections, and services through email newsletter(s) or app notifications. They could be the main target for most of the marketing campaigns, as they represent a balanced customer base.
Measure of Effectiveness: Monitor changes in sales during the marketing campaigns and track changes in the spending score of these customers. As well as monitoring the open/engagement rate of the newsletter(s) or notifications
Careful spenders (Cluster 1 - Blue):
High Income, Low Spending Score
Plan: Upsell and cross-sell higher-end products to these customers. This can be implemented through a rewards program where customers earn points for every purchase, which can be redeemed for discounts or special items. Provide exclusive early access to new products and personalized recommendations based on their browsing history.
Measure of Effectiveness:: Track the number of higher-end products sold, changes in the average transaction value, and changes in their spending score.
Sensible customers (Cluster 2 - Green):
Low Income, Low Spending Score
Plan: Offer value-for-money products and discounts. Implement a loyalty program with rewards that encourage repeat purchases, as these customers are perhaps more prices conscious than other groups. Send personalized offers and discounts to increase their spending. Promote these offers through targeted ads, flyers, notifications, and newsletter(s).
Measure of Effectiveness: Track the number of customers who join the loyalty program, their purchase frequency, sales of value-for-money products, the usage of discounts, and changes in their spending score.
Careless spenders (Cluster 3 - Orange):
Low Income, High Spending Score
Marketing Plan: Since these customers have low income but high spending, we can deduce that a majority of this cluster may be students and or young professionals. Due to our analysis, highlighted in our graph "Distribution of Clusters by Age Group", we have additional insights, that does supports this claim. With this analysis we can infer that this cluster may be attracted to more trendy items, so keeping them engaged with the latest trends and styles, organizing flash sales, tailored discounts, and limited-time offers, may be highly effective. These events can be promoted through social media and push notifications.
Measure of Effectiveness: Track changes in sales of trendy items. Monitor sales during events and increase in the number of new members to this group, and changes in their spending score.
Target customers (Cluster 4 - Purple):
High Income, High Spending Score
Plan: Provide exclusive offers, excellent customer service, and personalized engagement. This could include first access to new products, dedicated customer service lines (such as personal shoppers), invitations to special exclusive events, and early access to high-end products.
Measure of Effectiveness: Track customer retention rates, the average transaction value, and the usage of exclusive offers. Monitor responsive rate to personalized services and invitations and changes in their spending score.
These are broad strategies and can be adjusted based on the specific business context and customer behavior. The key is to monitor changes in customer behavior (like spending scores) and sales metrics to understand the effectiveness of the marketing plans.
It's also important to get customer feedback and conduct regular market research to refine these strategies.