MARKETING
Customer segment clusters dendrogram
Customer segment cluster dendrogram
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CASE ANALYSIS
Scenario
A marketing team is reviewing behavioural segments before deciding which campaigns to run.
Key decisions
- Segment labels: Use names that distinguish prospects from paying customers.
- Distance measure: Define the behavioural inputs behind customer distance before sharing the tree.
- Cut threshold: Use 2.5 to create an initial set of workable campaign groups.
When to reuse this
Use this diagram to explain a small segmentation model when the order of cluster merges matters as much as the final groups.
FAQ
Frequently asked questions
What is a customer segmentation dendrogram?
It is a hierarchy of customer groups built from their similarity on selected behaviours or attributes. Branches show the order in which segments merge.
What should customer distance represent?
It should represent a documented measure of difference, such as engagement, purchase cadence or product usage. The inputs should be consistent across every customer.
How do I choose a cluster cut?
Choose a threshold that produces a number of groups the team can act on, then check that each group has a meaningful business interpretation.
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phylo-customer-segment-clusters-dendrogram