Doing RFM Analysis in R


RFM is a method used for analyzing customer behavior and defining market segments. It is commonly used in database marketing and direct marketing and has received particular attention in retail.


RFM stands for


  • Recency – How recently did the customer purchase?
  • Frequency – How often do they purchase?
  • Monetary Value – How much do they spend?

To create an RFM analysis, one creates categories for each attribute. For instance, the Recency attribute might be broken into three categories: customers with purchases within the last 90 days; between 91 and 365 days; and longer than 365 days. Such categories may be arrived at by applying business rules, or using a data mining technique, such as CHAID, to find meaningful breaks.

from-http://en.wikipedia.org/wiki/RFM

If you are new to RFM or need more step by step help, please read here

https://decisionstats.com/2010/10/03/ibm-spss-19-marketing-analytics-and-rfm/

and here is R code- note for direct marketing you need to compute Monetization based on response rates (based on offer date) as well



##Creating Random Sales Data of the format CustomerId (unique to each customer), Sales.Date,Purchase.Value

sales=data.frame(sample(1000:1999,replace=T,size=10000),abs(round(rnorm(10000,28,13))))

names(sales)=c("CustomerId","Sales Value")

sales.dates <- as.Date("2010/1/1") + 700*sort(stats::runif(10000))

#generating random dates

sales=cbind(sales,sales.dates)

str(sales)

sales$recency=round(as.numeric(difftime(Sys.Date(),sales[,3],units="days")) )

library(gregmisc)

##if you have existing sales data you need to just shape it in this format

rename.vars(sales, from="Sales Value", to="Purchase.Value")#Renaming Variable Names

## Creating Total Sales(Monetization),Frequency, Last Purchase date for each customer

salesM=aggregate(sales[,2],list(sales$CustomerId),sum)

names(salesM)=c("CustomerId","Monetization")

salesF=aggregate(sales[,2],list(sales$CustomerId),length)

names(salesF)=c("CustomerId","Frequency")

salesR=aggregate(sales[,4],list(sales$CustomerId),min)

names(salesR)=c("CustomerId","Recency")

##Merging R,F,M

test1=merge(salesF,salesR,"CustomerId")

salesRFM=merge(salesM,test1,"CustomerId")

##Creating R,F,M levels 

salesRFM$rankR=cut(salesRFM$Recency, 5,labels=F) #rankR 1 is very recent while rankR 5 is least recent

salesRFM$rankF=cut(salesRFM$Frequency, 5,labels=F)#rankF 1 is least frequent while rankF 5 is most frequent

salesRFM$rankM=cut(salesRFM$Monetization, 5,labels=F)#rankM 1 is lowest sales while rankM 5 is highest sales

##Looking at RFM tables
table(salesRFM[,5:6])
table(salesRFM[,6:7])
table(salesRFM[,5:7])

Code Highlighted by Pretty R at inside-R.org

Note-you can also use quantile function instead of cut function. This changes cut to equal length instead of equal interval. or  see other methods for finding breaks for categories.

 

send email by R

For automated report delivery I have often used send email options in BASE SAS. For R, for scheduling tasks and sending me automated mails on completion of tasks I have two R options and 1 Windows OS scheduling option. Note red font denotes the parameters that should be changed. Anything else should NOT be changed.

Option 1-

Use the mail package at

http://cran.r-project.org/web/packages/mail/mail.pdf

> library(mail)

Attaching package: ‘mail’

The following object(s) are masked from ‘package:sendmailR’:

sendmail

>
> sendmail(“ohri2007@gmail.com“, subject=”Notification from R“,message=“Calculation finished!”, password=”rmail”)
[1] “Message was sent to ohri2007@gmail.com! You have 19 messages left.”

Disadvantage- Only 20 email messages by IP address per day. (but thats ok!)

Option 2-

use sendmailR package at http://cran.r-project.org/web/packages/sendmailR/sendmailR.pdf

install.packages()
library(sendmailR)
from <- sprintf(“<sendmailR@%s>”, Sys.info()[4])
to <- “<ohri2007@gmail.com>”
subject <- “Hello from R
body <- list(“It works!”, mime_part(iris))
sendmail(from, to, subject, body,control=list(smtpServer=”ASPMX.L.GOOGLE.COM”))

 

 

BiocInstaller version 1.2.1, ?biocLite for help
> install.packages(“sendmailR”)
Installing package(s) into ‘/home/ubuntu/R/library’
(as ‘lib’ is unspecified)
also installing the dependency ‘base64’

trying URL ‘http://cran.at.r-project.org/src/contrib/base64_1.1.tar.gz&#8217;
Content type ‘application/x-gzip’ length 61109 bytes (59 Kb)
opened URL
==================================================
downloaded 59 Kb

trying URL ‘http://cran.at.r-project.org/src/contrib/sendmailR_1.1-1.tar.gz&#8217;
Content type ‘application/x-gzip’ length 6399 bytes
opened URL
==================================================
downloaded 6399 bytes

BiocInstaller version 1.2.1, ?biocLite for help
* installing *source* package ‘base64’ …
** package ‘base64’ successfully unpacked and MD5 sums checked
** libs
gcc -std=gnu99 -I/usr/local/lib64/R/include -I/usr/local/include -fpic -g -O2 -c base64.c -o base64.o
gcc -std=gnu99 -shared -L/usr/local/lib64 -o base64.so base64.o -L/usr/local/lib64/R/lib -lR
installing to /home/ubuntu/R/library/base64/libs
** R
** preparing package for lazy loading
** help
*** installing help indices
** building package indices …
** testing if installed package can be loaded
BiocInstaller version 1.2.1, ?biocLite for help

* DONE (base64)
BiocInstaller version 1.2.1, ?biocLite for help
* installing *source* package ‘sendmailR’ …
** package ‘sendmailR’ successfully unpacked and MD5 sums checked
** R
** preparing package for lazy loading
** help
*** installing help indices
** building package indices …
** testing if installed package can be loaded
BiocInstaller version 1.2.1, ?biocLite for help

* DONE (sendmailR)

The downloaded packages are in
‘/tmp/RtmpsM222s/downloaded_packages’
> library(sendmailR)
Loading required package: base64
> from <- sprintf(“<sendmailR@%s>”, Sys.info()[4])
> to <- “<ohri2007@gmail.com>”
> subject <- “Hello from R”
> body <- list(“It works!”, mime_part(iris))
> sendmail(from, to, subject, body,
+ control=list(smtpServer=”ASPMX.L.GOOGLE.COM”))
$code
[1] “221”

$msg
[1] “2.0.0 closing connection ff2si17226764qab.40”

Disadvantage-This worked when I used the Amazon Cloud using the BioConductor AMI (for free 2 hours) at http://www.bioconductor.org/help/cloud/

It did NOT work when I tried it use it from my Windows 7 Home Premium PC from my Indian ISP (!!) .

It gave me this error

or in wait_for(250) :
SMTP Error: 5.7.1 [180.215.172.252] The IP you’re using to send mail is not authorized

 

PAUSE–

ps Why do this (send email by R)?

Note you can add either of the two programs of the end of the code that you want to be notified automatically. (like daily tasks)

This is mostly done for repeated business analytics tasks (like reports and analysis that need to be run at specific periods of time)

pps- What else can I do with this?

Can be modified to include sms or tweets  or even blog by email by modifying the   “to”  location appropriately.

3) Using Windows Task Scheduler to run R codes automatically (either the above)

or just sending an email

got to Start>  All Programs > Accessories >System Tools > Task Scheduler ( or by default C:Windowssystem32taskschd.msc)

Create a basic task

Now you can use this to run your daily/or scheduled R code  or you can send yourself email as well.

and modify the parameters- note the SMTP server (you can use the ones for google in example 2 at ASPMX.L.GOOGLE.COM)

and check if it works!

 

Related

 Geeky Things , Bro

Configuring IIS on your Windows 7 Home Edition-

note path to do this is-

Control Panel>All Control Panel Items> Program and Features>Turn Windows features on or off> Internet Information Services

and

http://stackoverflow.com/questions/709635/sending-mail-from-batch-file

 

Google introduces Google Play

Some nice new features from the big G men from Mountain view. Google Play- for movies, games, apps, music and books. Nice to see entertainment is back on Google’s priority.

 

See this to read more

https://play.google.com/about/

When will I get Google Play?

About Google Play

Q: What is Google Play?
A: Google Play is a new digital content experience from Google where you can find your favorite music, movies, books, and Android apps and games. It’s your entertainment hub: you can access it from the web or from your Android device or even TV, and all your content is instantly available across all of these devices.

Q: What is your strategy with Google Play?
A: Our goal with Google Play is to bring together all your favorite content in one place that you can access across your devices. Specifically, digital content is fundamental to the mobile experience, so bringing all of this content together in one place for users makes the Android platform even more compelling. We’re also simplifying digital content for Google users – you can go to the Google Play website on your desktop and purchase and experience the latest movies, music and books. With Google Play, we’re giving you a simpler way to get your digital content.

Q: What will the experience be for users? What will happen to my existing account?
A: All content and apps in your existing account will remain in your account, but will transition to Google Play. On your device, the Android Market app icon will become the Google Play store icon. You’ll see “Play Store.” For the movies, books and music apps, you’ll begin to see Play versions of these as well, such as “Play Music,” and “Play Movies.”

Q: When will I get Google Play? What markets is this available in?
A: We’ll be rolling out Google Play globally starting today. On the web, Google Play will be live today. On devices, it will take a few days for the Android Market app to update to the Google Play Store app. The music, books and movies apps will also receive an update today.
Around the globe, Google Play will include Android apps and games. In countries where we have already launched music, books or movies, you will see those categories available in Google Play, too.

Q: I live outside the US. When will I get the books, music or movies verticals? I only see Android apps and games?
A: We want to bring different content categories to as many countries as possible. We’ve already launched movies and books in several countries outside the U.S. and will continue to do so overtime, but we don’t have a specific timeline to share.

Q: What types of content are available in my country?

  • Paid Apps: Available in these countries
  • Movies: Available in US, UK, Canada, and Japan
  • eBooks: Available in US, UK, Canada, and Australia
  • Music: Available in US

 

Q: Does this mean Google Music and the Google eBookstore will cease to exist? What about my account?
A: Both Google Music and the Google eBookstore are now part of Google Play. Your music and your books, including anything you bought, are still there, available to you in Google Play and accessible through your Google account.

Q: Where did my Google eBooks books go? Will I still have access to them?
A: Your books are now part of Google Play. Your books are still there, available to you in your Google Play library and accessible through your Google account.

Q: I don’t use an Android phone, can I still use Google Play?
A: Yes. Google Play is available on any computer with a modern browser at play.google.com. On the web, you can browse and buy books, movies and music. You can read books on the Google Play web reader, listen to music on your computer or watch movies online. Your digital content is all stored in the cloud, so you can access from anywhere using your Google Account.
We’ve also created ways to experience your music and books on other platforms such as the Google Books iOS app.

Q: Why do I not see Google Play yet on my device?
A: Please see our help center article on this here.

Q: How can I contact Google Play consumer support?
A: You can call or email our team here.

R for Predictive Modeling- PAW Toronto

A nice workshop on using R for Predictive Modeling by Max Kuhn Director, Nonclinical Statistics, Pfizer is on at PAW Toronto.

Workshop

Monday, April 23, 2012 in Toronto
Full-day: 9:00am – 4:30pm

R for Predictive Modeling:
A Hands-On Introduction

Intended Audience: Practitioners who wish to learn how to execute on predictive analytics by way of the R language; anyone who wants “to turn ideas into software, quickly and faithfully.”

Knowledge Level: Either hands-on experience with predictive modeling (without R) or hands-on familiarity with any programming language (other than R) is sufficient background and preparation to participate in this workshop.


What prior attendees have exclaimed


Workshop Description

This one-day session provides a hands-on introduction to R, the well-known open-source platform for data analysis. Real examples are employed in order to methodically expose attendees to best practices driving R and its rich set of predictive modeling packages, providing hands-on experience and know-how. R is compared to other data analysis platforms, and common pitfalls in using R are addressed.

The instructor, a leading R developer and the creator of CARET, a core R package that streamlines the process for creating predictive models, will guide attendees on hands-on execution with R, covering:

  • A working knowledge of the R system
  • The strengths and limitations of the R language
  • Preparing data with R, including splitting, resampling and variable creation
  • Developing predictive models with R, including decision trees, support vector machines and ensemble methods
  • Visualization: Exploratory Data Analysis (EDA), and tools that persuade
  • Evaluating predictive models, including viewing lift curves, variable importance and avoiding overfitting

Hardware: Bring Your Own Laptop
Each workshop participant is required to bring their own laptop running Windows or OS X. The software used during this training program, R, is free and readily available for download.

Attendees receive an electronic copy of the course materials and related R code at the conclusion of the workshop.


Schedule

  • Workshop starts at 9:00am
  • Morning Coffee Break at 10:30am – 11:00am
  • Lunch provided at 12:30 – 1:15pm
  • Afternoon Coffee Break at 2:30pm – 3:00pm
  • End of the Workshop: 4:30pm

Instructor

Max Kuhn, Director, Nonclinical Statistics, Pfizer

Max Kuhn is a Director of Nonclinical Statistics at Pfizer Global R&D in Connecticut. He has been applying models in the pharmaceutical industries for over 15 years.

He is a leading R developer and the author of several R packages including the CARET package that provides a simple and consistent interface to over 100 predictive models available in R.

Mr. Kuhn has taught courses on modeling within Pfizer and externally, including a class for the India Ministry of Information Technology.

Source-

http://www.predictiveanalyticsworld.com/toronto/2012/r_for_predictive_modeling.php

Book Review- Machine Learning for Hackers

This is review of the fashionably named book Machine Learning for Hackers by Drew Conway and John Myles White (O’Reilly ). The book is about hacking code in R.

 

The preface introduces the reader to the authors conception of what machine learning and hacking is all about. If the name of the book was machine learning for business analytsts or data miners, I am sure the content would have been unchanged though the popularity (and ambiguity) of the word hacker can often substitute for its usefulness. Indeed the many wise and learned Professors of statistics departments through out the civilized world would be mildly surprised and bemused by their day to day activities as hacking or teaching hackers. The book follows a case study and example based approach and uses the GGPLOT2 package within R programming almost to the point of ignoring any other native graphics system based in R. It can be quite useful for the aspiring reader who wishes to understand and join the booming market for skilled talent in statistical computing.

Chapter 1 has a very useful set of functions for data cleansing and formatting. It walks you through the basics of formatting based on dates and conditions, missing value and outlier treatment and using ggplot package in R for graphical analysis. The case study used is an Infochimps dataset with 60,000 recordings of UFO sightings. The case study is lucid, and done at a extremely helpful pace illustrating the powerful and flexible nature of R functions that can be used for data cleansing.The chapter mentions text editors and IDEs but fails to list them in a tabular format, while listing several other tables like Packages used in the book. It also jumps straight from installation instructions to functions in R without getting into the various kinds of data types within R or specifying where these can be referenced from. It thus assumes a higher level of basic programming understanding for the reader than the average R book.

Chapter 2 discusses data exploration, and has a very clear set of diagrams that explain the various data summary operations that are performed routinely. This is an innovative approach and will help students or newcomers to the field of data analysis. It introduces the reader to type determination functions, as well different kinds of encoding. The introduction to creating functions is quite elegant and simple , and numerical summary methods are explained adequately. While the chapter explains data exploration with the help of various histogram options in ggplot2 , it fails to create a more generic framework for data exploration or rules to assist the reader in visual data exploration in non standard data situations. While the examples are very helpful for a reader , there needs to be slightly more depth to step out of the example and into a framework for visual data exploration (or references for the same). A couple of case studies however elaborately explained cannot do justice to the vast field of data exploration and especially visual data exploration.

Chapter 3 discussed binary classification for the specific purpose for spam filtering using a dataset from SpamAssassin. It introduces the reader to the naïve Bayes classifier and the principles of text mining suing the tm package in R. Some of the example codes could have been better commented for easier readability in the book. Overall it is quite a easy tutorial for creating a naïve Bayes classifier even for beginners.

Chapter 4 discusses the issues in importance ranking and creating recommendation systems specifically in the case of ordering email messages into important and not important. It introduces the useful grepl, gsub, strsplit, strptime ,difftime and strtrim functions for parsing data. The chapter further introduces the reader to the concept of log (and affine) transformations in a lucid and clear way that can help even beginners learn this powerful transformation concept. Again the coding within this chapter is sparsely commented which can cause difficulties to people not used to learn reams of code. ( it may have been part of the code attached with the book, but I am reading an electronic book and I did not find an easy way to go back and forth between the code and the book). The readability of the chapters would be further enhanced by the use of flow charts explaining the path and process followed than overtly verbose textual descriptions running into multiple pages. The chapters are quite clearly written, but a helpful visual summary can help in both revising the concepts and elucidate the approach taken further.A suggestion for the authors could be to compile the list of useful functions they introduce in this book as a sort of reference card (or Ref Card) for R Hackers or atleast have a chapter wise summary of functions, datasets and packages used.

Chapter 5 discusses linear regression , and it is a surprising and not very good explanation of regression theory in the introduction to regression. However the chapter makes up in practical example what it oversimplifies in theory. The chapter on regression is not the finest chapter written in this otherwise excellent book. Part of this is because of relative lack of organization- correlation is explained after linear regression is explained. Once again the lack of a function summary and a process flow diagram hinders readability and a separate section on regression metrics that help make a regression result good or not so good could be a welcome addition. Functions introduced include lm.

Chapter 6 showcases Generalized Additive Model (GAM) and Polynomial Regression, including an introduction to singularity and of over-fitting. Functions included in this chapter are transform, and poly while the package glmnet is also used here. The chapter also introduces the reader formally to the concept of cross validation (though examples of cross validation had been introduced in earlier chapters) and regularization. Logistic regression is also introduced at the end in this chapter.

Chapter 7 is about optimization. It describes error metric in a very easy to understand way. It creates a grid by using nested loops for various values of intercept and slope of a regression equation and computing the sum of square of errors. It then describes the optim function in detail including how it works and it’s various parameters. It introduces the curve function. The chapter then describes ridge regression including definition and hyperparameter lamda. The use of optim function to optimize the error in regression is useful learning for the aspiring hacker. Lastly it describes a case study of breaking codes using the simplistic Caesar cipher, a lexical database and the Metropolis method. Functions introduced in this chapter include .Machine$double.eps .

Chapter 8 deals with Principal Component Analysis and unsupervised learning. It uses the ymd function from lubridate package to convert string to date objects, and the cast function from reshape package to further manipulate the structure of data. Using the princomp functions enables PCA in R.The case study creates a stock market index and compares the results with the Dow Jones index.

Chapter 9 deals with Multidimensional Scaling as well as clustering US senators on the basis of similarity in voting records on legislation .It showcases matrix multiplication using %*% and also the dist function to compute distance matrix.

Chapter 10 has the subject of K Nearest Neighbors for recommendation systems. Packages used include class ,reshape and and functions used include cor, function and log. It also demonstrates creating a custom kNN function for calculating Euclidean distance between center of centroids and data. The case study used is the R package recommendation contest on Kaggle. Overall a simplistic introduction to creating a recommendation system using K nearest neighbors, without getting into any of the prepackaged packages within R that deal with association analysis , clustering or recommendation systems.

Chapter 11 introduces the reader to social network analysis (and elements of graph theory) using the example of Erdos Number as an interesting example of social networks of mathematicians. The example of Social Graph API by Google for hacking are quite new and intriguing (though a bit obsolete by changes, and should be rectified in either the errata or next edition) . However there exists packages within R that should be atleast referenced or used within this chapter (like TwitteR package that use the Twitter API and ROauth package for other social networks). Packages used within this chapter include Rcurl, RJSONIO, and igraph packages of R and functions used include rbind and ifelse. It also introduces the reader to the advanced software Gephi. The last example is to build a recommendation engine for whom to follow in Twitter using R.

Chapter 12 is about model comparison and introduces the concept of Support Vector Machines. It uses the package e1071 and shows the svm function. It also introduces the concept of tuning hyper parameters within default algorithms . A small problem in understanding the concepts is the misalignment of diagram pages with the relevant code. It lastly concludes with using mean square error as a method for comparing models built with different algorithms.

 

Overall the book is a welcome addition in the library of books based on R programming language, and the refreshing nature of the flow of material and the practicality of it’s case studies make this a recommended addition to both academic and corporate business analysts trying to derive insights by hacking lots of heterogeneous data.

Have a look for yourself at-
http://shop.oreilly.com/product/0636920018483.do

Using R for Cloud Computing – made very easy and free by BioConductor

I really liked the no hassles way Biocnoductor has put a cloud AMI loaded with RStudio to help people learn R, and even try using R from within a browser in the cloud.

Not only is the tutorial very easy to use- they also give away 2 hours for free computing!!!

Check it out-

Step 1

Step 2

Step 3

and wow! I am using Google Chrome to run R ..and its awesome!

Interesting- check out two hours for free — all you need is a browser and internet connection

http://www.bioconductor.org/help/cloud/

Sunburst and Cartograms in R

There are still some graphs that cannot be yet made in R using a straightforward function or package.

One is sunburst (which is  radial kind of treemap-that can be made in R). See diagrams below to see the difference. Note sunburst is visually similar to coxcomb (Nightangle) graphs. Coxcombs can also be manipulated and made- but I am yet to find a straight package to make coxcomb using a single function _histdata package in R comes close in terms on historical datasets.

The Treemap uses a rectangular, space-filling slice-and-dice technique to visualize objects in the different levels of a hierarchy. The area and color of each item corresponds to an attribute of the item as well.

The Sunburst technique is an alternative, space-filling visualization that uses a radial rather than a rectangular layout. An example Sunburst display is shown below. citation- http://www.cc.gatech.edu/gvu/ii/sunburst/

Coxcomb Below-

 

 

Other is cartogram -whose packages are MIA  -RCartogram is very basic package http://www.omegahat.org/Rcartogram/ – It is better to use Toad Scraper software than R for this kind of map.

Cartograms are  used to produce spatial plots where the boundaries of regions can be transformed to be proportional to density/counts/populations. This is illustrated in plots such as

Mark Newman’s plot of People living with HIV/AIDS
Citation: Friendly, Michael (2001), Gallery of Data Visualization, Electronic document, http://www.datavis.ca/gallery/,Accessed: 03/23/2012 18:23:33

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