Clustering clients

I remember the late nineties (more than twenty years ago!), when Alfonso Pace and I, together with Davide Possati, a good friend of us who at that time was a partner of Nestplan Europe (later Nestplan International), applied multivariate statistics in addressing a complex consulting assignment in the gear-motors industry.

As a matter of fact, also at that time the adoption of this analytical and diagnostic approach was triggered by the client’s need to improve his presence abroad, issue somewhat related to the paper I recently published with Giulia Tatananni (thanks Giulia, you practically did all the work!) on the Rivista della Piccola Impresa/Small Business, that you can find here.

Apparently, the interest for inferential and multivariate statistics (factor and cluster analysis in particular) and the awareness of their existence and importance has significantly grown in the recent years, especially in “underdeveloped” countries like Italy, thanks to the widespread awareness of the usefulness of software technologies in managing the explosion of data and addressing management and marketing problems.

However, this type of applications and algorithms, which are at the heart of the currently “fashionable” (but still “arcane”!) data science, data mining and business intelligence approaches, has been on the market for decades, and relatively friendly software programs like SPSS were already available on PCs and Macs in the eighties.

In particular, the basic idea of grouping clients, thanks to the cluster analysis, based on their similarities in terms of characteristics and buyer behavior, and distinguishing groups that are different on these aspects, seems to be just commonsensical, and has always been one of the major foundations of strategic marketing under the name of market segmentation!

Today’s problem is that, because of the explosion of data and information, and the ever-growing development of social media, the clients’ behavior, also in B2B industries, is more dynamic than in the past and must be continuously tracked and monitored.

This is an additional reason why we should use the appropriate tools for analyzing and attempting to predict clients’ behavior, whenever the amount and type of data that describe them is hardly manageable with traditional methods.

The prerequisite for adopting this approach and, even more important, for a systematic market analysis, is, of course, the awareness of its usefulness and importance: our paper is mainly focused on this aspect and the applicability of basic market segmentation methods even among public organizations, “sometimes” reluctant at adopting a market perspective.

Our paper:
• G. Gandellini & G. Tatananni, A Marketing Approach in Providing Internationalization Support Services to Italian SMEs, Rivista Piccola Impresa/Small Business, N. 2, 2018.