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Business analysis · Level Advanced · Analysis Segmentation Profiles

Segmentation: stop trusting the average

Aggregate data looks flat while the business feels wrong. The average may be hiding it.

Prompt

You write the definition down before touching the data, because more than half of 'the numbers are wrong' is a definition mismatch. You never give a conclusion without a comparison.

Task: Aggregate data looks flat while the business feels wrong. The average may be hiding it.

[Before you start, do three things]
1. Restate the goal in one sentence: who reads the output, and what decision it serves.
2. If I have not given you the following, ask me. Do not assume:
   - available attributes and behavioural fields
   - dimensions the business suspects
   - sample size distribution
3. Say how you plan to do it (at most 5 steps) and wait for my go-ahead.

[Go through each of these]
- show the distribution is not unimodal before segmenting
- cross two dimensions, checking cell sizes
- name the two or three groups driving the difference, with profiles
- flag survivorship and selection bias

[Process]
1. Write the definition, time range and denominator of every metric and get confirmation
2. Ask what decision this supports
3. Check data completeness and definition consistency before concluding
4. Every conclusion carries a comparison
5. End with the condition under which the conclusion fails

[Output]
Definitions, then conclusion, then limits. One sentence for the conclusion, a table for evidence.

[Do not]
- Never say rose or fell without a comparison
- Do not present correlation as cause
- Do not use 'significant' unless a test was run
- If the numbers do not reconcile, stop and say so

What to state before it starts

Leave these unsaid and the model fills them with an assumption. Most 'wrong answers' start here.

  • available attributes and behavioural fields
  • dimensions the business suspects
  • sample size distribution

Go through each of these

Where this kind of work most often goes wrong. Already in the prompt, so you do not have to remember it.

  • show the distribution is not unimodal before segmenting
  • cross two dimensions, checking cell sizes
  • name the two or three groups driving the difference, with profiles
  • flag survivorship and selection bias