Segmentation and Analysis
There's just little bit left! In this section we will take a look at concepts such as segmentation and analysis.
Let's take a look at a few examples that illustrate segmentation.
RFM analysis - an analysis method that allows you to segment customers by the purchase frequency and amount. It can also help identify which customers bring in more money.
The abbreviation RFM stands for:
  • Recency - how long it has been since your customers bought something from you;
  • Frequency - how often they buy from you;
  • Monetary - total amount purchased.
Based on these criteria, you can separate all your customers into groups and understand which customers buy often and spend a lot of money, who buys often but spends little, and who hasn't bought anything for while.
Next, let's take a look at user conversion
To ensure that version 10 isn't worse off than version 1, you need to understand what changes make one version different from another.
To use cohort analysis correctly, you need to distinguish between the various types of metrics.