Goal#
This post provides sales managers ability to run simple Basket Analysis insights on their own without having to request support from Data Analyst. Our goal is to offer practical, easy-to-implement strategies that help you drive performance and achieve measurable results.
Key Idea#
Basket analysis using Association Rule, involves understanding purchase patterns over time to see how products relate to each other within a customer’s buying journey. In this approach, each customer is viewed as a “basket,” meaning we analyze product relationships based on all items they’ve bought, across different orders. The purpose is to find patterns in what customers purchase together, over time, rather than in a single transaction.
Key metrics, like support, confidence, and lift, are used to understand these product relationships:
- Support: The percentage of total customers who bought both items. It gives a sense of the prevalence of a combination in the overall population.
- Confidence: The likelihood that a customer who bought one product also bought another.
- Lift: The strength of the association between two products. A lift greater than 1 implies a meaningful association that could predict future purchases.
For example, if “Computers” and “Cell phones” frequently appear in a customer’s purchase history, the analysis could reveal that customers who buy “Cell phones” have a high likelihood of also purchasing “Computers,” helping companies understand customer preferences and potentially guiding personalized marketing strategies.
Additional interests?#
So, because the purpose of this article is to give sales manager a tool that they can just plug in with their own data to generate some reports, i am just going to focus on that. if you are interested in knowing more about this topic, feel free to move to another article of mine.
[Basket Analysis for Data analyst]({% post_url 2024-11-04-basket-analysis-for-data-analyst %})
Template: Plug in your own data#
There are detailed instructions in the file. I’ve tested with some of proprietary data I have access to, it worked. but in case yours throw errors, feel free to pin me an email with screenshot and I shall come back as soon as i can.
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