Hierarchical Clustering

Tree-based clustering algorithm. A working definition from the RGM marketing glossary.

Schematic — Hierarchical Clustering

Tree-based clustering algorithm.

Where teams go wrong

One idea, plainly put.Four failure modes recur with Hierarchical Clustering. Name them and they are easy to design around.

One-size thinking. Using Hierarchical Clustering flat across every segment. The right cut differs by channel and margin.
No anchor. Quoting Hierarchical Clustering without a starting point. Always pair it with a baseline.
Wrong target. Treating Hierarchical Clustering as the goal. The goal is the outcome it predicts.
Raw benchmarks. Stacking Hierarchical Clustering against rivals blind. Normalize for margin, pricing, and sales cycle.

What is Hierarchical Clustering?

Tree-based clustering algorithm. Settle what Hierarchical Clustering covers first; the strategy follows from there.

What makes Hierarchical Clustering worth knowing?

Hierarchical Clustering matters because vague vocabulary breaks strategy. A precise, shared definition keeps a team aligned.

How is Hierarchical Clustering used in practice?

Teams put Hierarchical Clustering to work on a spend split, a metric, or a head-to-head call. See the Netflix walk-through above.

What is the most common mistake with Hierarchical Clustering?

Using Hierarchical Clustering flat across every segment and showing it without context. Both make a guess look exact.

What is Hierarchical Clustering?: Tree-based clustering algorithm. Settle what Hierarchical Clustering covers first; the strategy follows from there.
What makes Hierarchical Clustering worth knowing?: Hierarchical Clustering matters because vague vocabulary breaks strategy. A precise, shared definition keeps a team aligned.
How is Hierarchical Clustering used in practice?: Teams put Hierarchical Clustering to work on a spend split, a metric, or a head-to-head call. See the Netflix walk-through above.