The Online Customer: New Data Mining and Marketing Approaches By ...

2

Segmenting Customer Transactions Using a Pattern-Based Clustering Approach

2.1 Introduction

Businesses gather an enormous amount of data in their day-to-day operations. Every interaction with a customer generates data and the amount of data gathered is rising exponentially (Ericsson 2003). As technology advances, firms are able to track the origin of the transactions through customer identifiers such as cookies, shopper cards, credit card numbers, cell phone numbers etc. More and more, firms are increasingly realizing the importance of understanding and leveraging customer-level data, and critical business decision models are being built upon analyzing such data (Linden et al. 2003). For example, Amazon.com offers