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Network Analysis

For Customer Community Detection


Difficulty: Intermediate

Matt Dancho & David Curry


Business Science Learning Lab
Learning Lab
Structure

● Presentation
(20 min)

● Demo’s
(30 min)

● Pro-Tips
(15 mins)
“I’ve been [messing] around with Python for 4 months.
Success Story I learned more in the 2 days I did Jumpstart with R.”

Josh Nelson

- Friday - Began Jumpstart


- Sunday - Began 101
- Monday - Analyzing
Google Analytics API &
Plotting

#Business
Science
Success
Agenda
● Business Case Study ● 30-Min Demo
○ Customer History ○ Bank Customers
○ Account History
○ EDA
○ Network Analysis
● Network Analysis ○ Machine Learning
○ 2 Types
○ Key Concepts

● Pro-Tips:
○ Tactics to Explain
● R Packages Why Customers
○ tidygraph belong to
○ ggraph Communities
Learning Labs Lab 18
Time Series Anomaly Detection
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Recordings + Code + Slack Lab 16


R’s Optimization Toolchain, Part 2
$19/month - Nonlinear Programming

Lab 15
R’s Optimization Toolchain, Part 1
university.business-science.io - Linear Programming

Lab 14
Customer Churn Survival Analysis
Customer Communities
Business Case
Customers Naturally Form
Communities

Can Be Profitable to
Detect Communities
Customer Communities are Natural
Phenomenon

Detection is really important:

1. Avoid Trap of Focusing on


EVERYONE
2. Customize Products & Services for
Key Groups
Customer History
Descriptive Features
Customers
Network Analysis Basics
80/20 Concepts
Types of Network Analysis

1 2
Undirected Directed

Strength of Relationship Hierarchical Structure

Clustering Composition of
Groups
Types of Network Analysis

1 2
Undirected Directed

Strength of Relationship Hierarchical Structure

Clustering Composition of
Groups
Core Concepts
80/20
Adjacency Matrix

Key Concept
N x N matrix of Relationship
Strength (Measure)
Nodes & Edges

Nodes

● Customers

Edges

● Relationship Strength

Clusters (Groups)

● Densely Connected Web

Key Concept

Groups (Clusters) have


more edges connecting
more nodes at a given
relationship threshold.
Pruning & Threshold

Threshold = 0.9999 Threshold = 0.99


Pruning Too High Too Low
● Filtering to reduce to the
most “influential” nodes

● We use a threshold to
find an optimal
visualization that explains
the groups
Threshold = 0.996
Just Right!

Key Concept

Data mining is subjective.


Where do we cut off?
Network Analysis
Software
tidygraph

Tidy Network Data

● Combines Node and Edge Data inside


1 tidygraph object

● Makes it super easy to work with


network data

● Can activate() inner node and edge tbls


to manipulate them

● Can apply special network analysis


functions like group_components() &
centrality_degree()

https://github.com/thomasp85/tidygraph
ggraph

Visualization Package for


tidygraph data

https://ggraph.data-imaginist.com/
Customer Segmentation Workflow
Step-By-Step

Start Finish
1 2 3

Data Clean & Adjacency Matrix, H2O & LIME


Transform tidygraph, & ggraph Predict & Explain

Exploratory Data Analysis Visualizations Customer Segments

Develop Segments
30-Min Demo
Analyze Customer Networks
Secret Tactics for

Network Analysis
Use these tips to
increase your customer segmentation explainability
Pro Tip
Use H2O & LIME to EXPLAIN WHY
Data Science Transformation
Skills that are needed to do what we just did
Customer Segmentation Workflow
Step-By-Step

Start Finish
1 2 3

Data Clean & Adjacency Matrix, H2O & LIME


Transform tidygraph, & ggraph Predict & Explain

Exploratory Data Analysis Visualizations Customer Segments

Develop Segments
101 & 201 Lab 19
Data Cleaning
201
dplyr, ggplot2

101 & 201


Adjacency Matrix, tidygraph, & ggraph

Lab 19
ggplot2 & purrr

201
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