What are descriptive analytics?
Descriptive analytics are based on historical data and are used to describe performance of certain attributes over a given period of time. Descriptive statistics are often based on simple math or statistical analysis, such as correlation. The most common medium of communicating descriptive statistics is through a dashboard.
Why descriptive statistics useful for customer segmentation?
Descriptive statistics enable businesses to segment customers based on different attributes, thereby grouping their customer base by certain attributes. Segmentation enables businesses to create bespoke strategies and tactics for specific customer segments.
The data sets that could be used are manifold, but here are three common types of data sets that are used.
I recommend using behavioral-based data, such as transaction history or social/online profiles. Why?
Actions speak louder than words. What somebody or something DID, is more telling than heuristic-based assumptions applied to companies based on their size, industry, etc. or individuals belonging to a specific demographic.