Customer Segmentation using Logistic Regression (R)

Machine learning has found application in various sectors of human endeavors of which marketing is not an exemption. Marketing is a key part of any business. It requires strategic steps to maximize its impact in today’s dynamic world using every available medium. In this work, we applied Logistic regression – a classification algorithm in machine learning to achieve this goal. Our goal is to achieve high true positive (TP) and reduce false negative or type 2 error. In other words, we want to have high tolerance on false positive or type 1 error. We used two methods in our choice of algorithm and evaluated them. Both methods gave accuracy of 0.70 but one method outshines the other in terms of error type reduction.