Customer Segmentation Based on Self-Organizing Maps: A Case Study on Airline Passengers

Abstract

Customer segmentation is a customer grouping model based on commonfeatures and it directly relates with customer satisfaction of the companies.It provides access to the right customer with the right methods by knowingthe customer better. Dealing with changes in a competitive market meansairlines have to redefine customer segmentations, which translates fromsocial-demography to a more complex behavioral approach that covers theentire travel experience and the way airlines deliver at every touch point. Inthis paper, a customer segmentation was performed using an airline ticketsales data and focused on two concepts such as customer loyalty andcustomer return. Customers with similar sales tendencies were clustered byusing self- organizing map method and totally 15 clusters were obtained. Inpurchasing trends, the highest return was obtained in cluster 2 and theminimum return in cluster 6. Loyalty rate was calculated as 38% and it wasseen that the most loyal customer profile was in the cluster 12.