A methodology for Internet Customer segmentation using Decision Trees

Application of existing decision tree algorithms for Internet retail customer classification is apt to construct a bushy tree due to imprecise source data. Even excessive analysis may not guarantee the effectiveness of the business although the results are derived from fully detailed segments. Thus, it is necessary to determine the appropriate number of segments with a certain level of abstraction. In this study, we developed a stopping rule that considers the total amount of information gained while generating a rule tree. In addition to forwarding from root to intermediate nodes with a certain level of abstraction, the decision tree is investigated by the backtracking pruning method with misclassification loss information.