Summary

You have created a discriminant model that classifies customers into one of four predefined "service usage" groups, based on demographic information from each customer. Using the structure matrix and territorial map, you identified which variables are most useful for segmenting your customer base. Lastly, the classification results show that the model does poorly at classifying E-service customers. More research is required to determine another predictor variable that better classifies these customers, but depending on what you are looking to predict, the model may be perfectly adequate for your needs. For example, if you are not concerned with identifying E-service customers the model may be accurate enough for you. This may be the case where the E-service is a loss-leader which brings in little profit. If, for example, your highest return on investment comes from Plus service or Total service customers, the model may give you the information you need.

For information on how the company initially segmented its customer base, see Using K-Means to Classify Customers.

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