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One of the best things about modern computers is how modular they are. Desktop computers in particular make it relatively simple to swap out just about any component for a better one. 

However, a computer is a complex system, so how should you know which components need upgrading? What should you upgrade on your PC?

Table of Contents

The Weakest Link

The ideal computer is built from a mix of components that are well matched to each other. You don’t want a situation where one component is holding the entire system back because it can’t keep up.

This issue is the bane of pre-built computers, especially budget models. System builders will allocate budget to headline components such as the CPU and the scrimp on other components to stay below a target price.

The end result is a pretty unbalanced machine. Alternatively, your computer may have been just fine when it was first built, but now one or more components can’t keep up with new software.

The CPU

The CPU or Central Processing Unit does all the general-purpose number crunching of the computer. Everything the computer does depends in some way on the CPU. How can you know if your CPU is underpowered?

The most obvious way is to let the software you want to use be your guide. Applications and games usually come with a minimum and recommended CPU spec. If your CPU falls below the minimum, that’s a rather obvious sign you need something new.

Regardless of on-paper requirements, to figure out if your CPU is holding you back you need two things. The first is a CPU usage monitor and the second is simply your own eyes. What we want to do is see how much of the CPU’s capacity is being used while you go about your business.

For desktop applications, you can simply use the built-in performance monitor in Windows Task Manager. This will show you the percentage of your CPU capacity in use. If you are a gamer on Windows, then you can use the Windows Game Bar (by holding Win+G during a game) and pin the performance widget on the bottom left on the screen, so you can see what’s happening with your system while you play.

Here’s the tricky bit – having your CPU pegged at 100% during operation isn’t necessarily a sign that it needs an upgrade. There are many tasks (such as video conversion or rendering) that will always use 100% of the available CPU capacity. Regardless of whether you have the fastest CPU in the world or the slowest. The only effect is that the job will take longer to complete on slower CPUs. 

If this is the sort of job you need your CPU to do, then you’ll have to decide whether the time it takes with your current hardware is acceptable or not. For professionals for whom time is money, halving production time may be worth far more than the cost of an upgrade.

Where poor CPU performance really hurts is for real-time computer use. If your CPU is showing high levels of usage when using applications and system responsiveness is poor, getting a faster model may be a good idea.

CPU Upgrades for Gamers

For gamers, it’s a little more complicated. The desirable situation is to be “GPU-limited”. That is, the maximum performance of your video games should be limited by your graphics chip and not CPU.

In the Windows Game Bar performance widget, you want to see 100% (or close to it) GPU usage and sub-100% CPU usage. If the situation is reversed, then you’ll experience stutters and possibly unacceptable frame rates. 

You can work around this in various ways without a hardware upgrade. Limiting your frame rate using your GPU utility, in-game settings or simply Vsync can take some stress off your CPU and smoothe out the game. You can also try increasing game graphics settings to the point where the GPU becomes the limiting factor, giving the CPU some time to breathe.

RAM – Random Access Memory

RAM is the fast storage space your CPU uses when working with data. Running applications reside in RAM while in use, which means you need enough of it to fit all the programs you want to run at once.

If you don’t have enough RAM to hold your running applications, it can seriously impact your computer’s performance. Since the computer is forced to store the overflow on your hard drive using something called a “paging file”. Since hard drives (and even SSDs) are much, much slower than RAM you’ll really feel the performance impact.

How do you know if you’re running into this issue? Well, checking the amount of RAM in use doesn’t actually help much. That’s because modern operating systems try to predict what you’ll want to do next and pre-load data into RAM in anticipation of this.

Instead, a better option is to check the actual RAM usage of the applications you are running and see whether it adds up to more (or nearly as much) RAM than you have.

Upgrading isn’t automatically the answer. For one thing, you can decide not to run all your applications at once. For example, if you are a gamer you could try closing applications (such as your browser) when playing, instead of letting it soak up system resources in the background.

You may also be wondering about RAM speed. This is almost never a concern and putting in faster RAM for its own sake rarely makes any sort of practical difference. However, if you are swapping out your current RAM for new sticks with more capacity, you may as well opt for units as fast as your motherboard is rated for.

The GPU

The GPU or Graphics Processing Unit is a specialized chip that handles graphics rendering duties on your computer. It can be built into your CPU package, soldered onto the motherboard as a separate unit (as is usual with laptops) or exist on its own separate expansion card. Which is the norm for desktop computers.

While the GPU is designed to handle graphics rendering work, it can also perform other more general-purpose jobs. These days it’s often used to quickly perform certain types of computations that CPUs aren’t great at. Video editing programs, for example, often include the option to let the GPU accelerated video rendering.

When it comes to these general-purpose jobs, determining if a GPU is fast enough works the same as with a CPU. You need to decide if the time taken to complete the job is fast enough for your purposes.

When it comes to real-time rendering applications such as video games, then we want to see a frame rate that’s high enough at a given resolution and detail level.

What’s a good frame rate? Well, that’s largely personal preference. A common target is a stable 60 frames per second. Since the majority of consumer displays refresh their image at 60Hz, any frames rendered above that number are wasted. 

That being said, there are now specialized gaming monitors with refresh rates well over 100hz, in which case you will actually benefit from letting your system push out more frames, if it can. If you are a gamer, it’s pretty important to buy a GPU that won’t be held back by your existing CPU. Check out our GPU bottlenecking guide for more info on this issue.

Hard Drives

Do you need to upgrade your computer’s hard drive? It’s actually a pretty sophisticated question. If you are simply running out of space on the drive you currently have, it might just be simpler to delete some stuff. Uninstall programs you aren’t using.

Clear out your recycle bin and all the other things on the list of ways to free up space. With cheap cloud storage these days, you can even shift your data into the cloud using a service like DropBox. Which is certainly much cheaper (and secure) than buying a new hard drive.

Drives with more platters, faster rotational speeds and large data buffers will perform more quickly. Modern solid-state drives (SSDs) have no moving parts at all. They can find and transfer data much, much faster than any mechanical drive.

If your computer has a mechanical hard drive as it’s main drive, it’s almost always worth upgrading to an SSD. In fact, it’s one of the most impactful upgrades for older computers, producing a bigger subjective performance increase in overall system responsiveness than anything else you could do.

Let The Software Be Your Guide

In the end, a computer is only a means to an end. In other words, it’s the software we really care about. Which means the primary driver of your upgrade plans should be the system requirements of the apps you want to run. 

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Should I Install Windows 11 22H2 On My Pc? Yes, But Proceed With Caution.

UPDATED 1/18/2023: Windows 11 22H2 is a free upgrade for computers already running Windows 11 21H2 or Windows 10 that meet the minimum system requirements since September 20, 2023. However, the rollout is gradual to ensure that devices have a good upgrade experience, which means it’ll take months before the new version reaches every device.

Microsoft usually starts offering the Windows 11 2023 Update (version 22H2) to devices with newer hardware, and it continues expanding to more eligible computers, and it’s expected to be fully available during the first half of 2023.

This guide will help determine whether you should install or skip the Windows 11 22H2 upgrade on your computer.

Should you upgrade to Windows 11 22H2?

The best and short answer is “Yes,” it’s OK to upgrade to Windows 11 22H2 since the new version is stable and safe to install on devices that meet the requirements. However, since the feature update may still not be fully compatible with every computer during the early days (and beyond), the company is expected to throttle the rollout to ensure that only fully compatible hardware received the update initially.

Also, you want to ensure that there aren’t any known issues that may negatively affect the experience before upgrading. Since the initial rollout started, Microsoft has noted many problems with the operating system, which the company has already addressed, confirmed, and currently investigating.

Problems during the early days are very well expected. Microsoft is not unaware of the matter, and we’ve seen issues many times before. For this and other reasons, the software giant uses Artificial Intelligence (AI) and Machine Learning (ML) to analyze and only offer the new version to devices with a good upgrade experience – even though it’s not perfect. As the latest release proves to be more stable, the rollout will expand to other computers based on hardware eligibility, reliability metrics, age of the computer, and other factors.

Also, on the health dashboard website, Microsoft will publish any known issues that can help you decide whether or not to proceed with the upgrade.

If you have a computer with unsupported hardware, you should not try to upgrade to Windows 11 22H2. However, there are ways to upgrade an unsupported computer. If you install version 22H2, the device will be in an unsupported state. According to Microsoft, computers will likely experience more crashes, support won’t be available, and updates won’t be guaranteed.

Should I wait to install Windows 11 22H2?

Yes, you should always wait at the beginning. It is never a good idea to quickly jump into an upgrade since unknown bugs, errors, and compatibility issues are expected during the beginning of a rollout.

After version 22H2 becomes available, your device will (eventually) receive a notification through the Windows Update settings to upgrade manually. If you don’t receive the message, forcing the Windows 11 22H2 upgrade is not recommended because you will likely run into issues. For example, errors like “This PC can’t be upgraded to Windows 11,” “This PC can’t be upgraded to this version of Windows 11 because of a service or driver that’s not ready yet,” or similar errors.

Usually, it’s recommended to wait until Windows 11 22H2 is fully available to make sure to install the most stable build. (This feature update for Windows 11 has been fully available since November 18, 2023.)

If your computer has an older Windows release and no issues, it’s not worth the upgrade. You should wait a little longer. However, you should not skip the update entirely. Eventually, that specific version will be discontinued, and it will no longer receive maintenance updates, leading to other issues and making it vulnerable.

Why Are Games Crashing On My Pc?

PC gamers can optimize Windows 11/10 to improve gaming – and for gamers on Windows 11, there are a couple of gaming settings you need to know and tweak for an even better experience. In this post, we take a look at why your games are crashing on your Windows PC and also offer suggestions on how gamers can mitigate the usually unexpected occurrence of this issue.

To proffer concrete remediation to games crashing on PC, you need to identify the main factors that are the culprit. Below are the most common causes of this issue:

Gaming PC doesn’t meet minimum specs

PC has been overclocked

Incorrect or wrong game settings

Graphics adapter consumimg too much power

Windows operating system is outdated

Outdated device drivers

Poor or slow network connection

Digital Rights Management (DRM) issues

Games are running in the wrong mode

Security software interference

VPN issues

Too many open browser tabs

Why are games crashing on my PC

As we have identified the most reasons why games crash on PC, we can now proceed to outline measures PC gamers can apply or put in place prevent this occurrence at the barest minimum. In no particular order, the following are suggestions you can try to prevent or fix game crash issues on your Windows 11/10 gaming rig. We suggest you give your gaming system a restart as this simple action can fix game crash issues, assuming there are no serious underlying issues with your hardware or OS.

Check system requirements

Stop overclocking

Check game graphics settings

Check the power supply unit (PSU)

Make sure Windows is updated

Make sure drivers and games are updated

Check network/internet connection

Enable Game Mode

Check and adjust security software settings

Reinstall game

Let’s see these in detail.

1] Check system requirements

The main and obvious reason why games crash on PC is, the gaming system spec doesn’t meet the game’s minimum requirements. So, when buying games online from Steam and similar services, make sure to review the game’s description for the system requirements. If you’re buying the physical copy of the video game from a brick-and-mortar store, you’ll find the minimum and recommended system requirements on the back of the video game packaging.

You can always check the game vendor site for this informations. If your PC meets these requirements, you shouldn’t have any issues installing and running the game. Otherwise you will need to upgrade your PC before you can play the game – this could require you to simply upgrade the hardware components (like RAM, storage disk etc) on your rig or purchase a new gaming PC.

Read: Farming Simulator 22 crashing or freezing on Windows PC

2] Stop overclocking

Although with good ventilation and cooling, CPU overclocking and GPU overclocking can significantly increase performance as many gamers still engage in this practice. However, it isn’t a perfect method as games can still crash. So, if you have overclocked your PC, you can simply reverse the change depending on the overclocking software in use. Generally, launch the software and look for the option to stop the overclocking or uninstall the software altogether. This basically will reset your processor (and GPU, if appropriate) to default settings. Once done, restart your computer and see if the crash issue is resolved. Otherwise, the issue is caused by something else.

Read: Diablo 3 keeps crashing or freezing on Windows PC

3] Check game graphics settings

To help you get the most out of your game, most games, especially those with high system requirements, have a dedicated video settings screen. Games tend to boot with a configuration designed for your system hardware, but this can cause game crashes sometimes. In this case, you can troubleshoot by lowering the game settings in the video configuration screen. You can keep adjusting the settings until you hit the right mix of performance and graphics. If you graphics card is unable to handle high resolutions, you will have to upgrade to a more powerful graphics hardware.

Read: How to enable Optimizations for windowed games in Windows 11

4] Check the power supply unit (PSU)

If the graphics adapter installed on your Windows 11/10 gaming PC is drawing more power than is available on the PSU, you’re likely to experience game crashes. The only solution as it applies in this case, is to upgrade to the best PSU capable of providing enough power to play the game. Before swapping out the PSU, check how much power your PC needs. Also, make sure there’s no dust or particles build-up on the graphics card and PC interior to prevent high PC temperature which can lead to performance issues and possibly system crash.

Read: How to measure your PC’s total power consumption

5] Make sure Windows is updated

Your game’s system specification should list the correct operating system and version required to run the title. Most AAA games are designed for 64-bit systems and is expected to run without issues on newer versions of Windows. Generally, the issues of operating systems and hardware are interlinked – in the sense that older hardware running Windows 11/10 may be suitable for running the most up-to-date video games. But your games will likely crash if you play on an old or outdated operating system. So make sure Windows is updated to the latest build/version to keep up with game improvements and requirements for the best gaming experience.

Related: Games loading slow on Windows PC

6] Make sure drivers and games are updated

If games are crashing on your PC, before you try forking out money to purchase a new gaming rig, you should first update drivers and the game itself; assuming you are running the latest version of Windows on your rig.

Games can crash for reasons beyond (but not unrelated to) unsuitable hardware and operating systems. Video drivers, for instance, should be up-to-date, as should the game itself. Although some games will automatically check for updates and install them before they load, you can manually check for patches and updates for the game in question at the publisher’s website

Depending on your PC, manufacturers have made available special driver download software for their brands that you can use to update update drivers and firmware:

You can also use a third-party free driver update software or you can download the latest version of the device driver you need from the hardware manufacturer’s website.

7] Check network/internet connection

Especially with online gaming, you may experience game crashes when slow or poor network delays the game client being updated by the remote server. To prevent this issue, make sure that your network speed is suitable for playing games. Check your internet device and disable other internet applications to ensure that only the game receives data. For the best online gaming experience, you can connect your PC directly to the router via Ethernet and avoid using WiFi where possible. You may have to use a Powerline Ethernet Adapter to overcome any architectural limitations.

In some cases, network issues can contribute to Digital Rights Management (DRM) affecting a game’s performance or the remote server status causing the game to crash. In this case, you can play offline if the option is available for the game. This will prevent the DRM from checking with the remote server for suspicious activity in the game or account.

Still on network issues causing games to crash, your VPN/GPN software can also cause games to keep closing on your PC, particularly online games. This can occur if the VPN server is down, or if the VPN client isn’t able to maintain a connection. Distance can also play a part, as you’ll have to deal with latency when playing on a specific game server located at another region. In any case, the applicable solutions here, is to switch to a faster and more stable VPN, invest in a faster internet connection or disconnect from the VPN when accessing a specific game server.

Read: How to optimize Windows 11/10 for Online Gaming

8] Enable Game Mode

Interference by other open and running apps while gaming on your Windows 11/10 computer can cause the game to crash. So, close all other apps before launching the game you want to play, as this will even free up more system resources for the game to run smoothly. This also applies to your browser as well – so make sure not to open multiple tabs than necessary. You might need voice chat software like Discord or Game Bar; beyond that your PC resources should be focused on running the game.

In addition, you can enable Game Mode to reduce and limit other activity so that your game can freely run with sufficient system resources.

9] Check and adjust security software settings

Apps, processes, and services running in the background can impact the performance of gaming, and your security software is not an exception. Your AV is actively looking for suspicious files. Sometimes, these files are scanned, which can cause the PC to hang or freeze, and then crashes due to security scanning. The game in play can also crash because a legitimate game file is identified as harmful and quarantined. In this case, you can either reduce the level of (or disable) file scanning when gaming, replace your security software with one that has “game mode” option, or temporarily disable (if possible) the security software for the duration of your gameplay.

On the other hand, games can crash on your PC if infected by a virus/malware. So be sure to keep your AV updated and manually scan your system periodically.

10] Reinstall game

Other things being equal, this is a viable solution to the game crashing on PC, because it could be that the issue is caused by corrupted or damaged game files or even a botched game installation that is missing crucial game files. In this case, you can uninstall the game (preferably, use uninstaller software), reboot PC, and then download and reinstall the latest version of the game on your Windows 11/10 PC.

I hope this post is informative and helpful enough for you!

These posts might interest you:

What causes games to crash on PC?

The game may close, generate an error, or crash during start or during play if your Windows 11/10 computer does not meet the system requirements of the game or because of outdated drivers. This can also happen if your PC is infected by a virus.

Why do all of my games keep crashing?

There could be a number of reasons why apps or games freeze or crash, especially when you consider the wide range of chipsets, screen resolutions, custom skins on Android smartphones. One reason could be low memory or a weak chipset. Apps can also crash if they are not coded properly.

How do I fix a crashed game?

To fix a crashed game on Windows 11/10 computer, you can try the following suggestions:

Install the latest drivers

Install the necessary software

Make sure the PC doesn’t overheat

Disable background programs

Disable the onboard sound device

Scan for malware

Check your Hardware

Read: Lost Ark keeps crashing on Windows PC

Can RAM cause games to crash?

RAM can sometimes cause specific problems on your PC. Some gamers report that games keep crashing after adding new RAM. This usually occurs when trying to run high-speed DDR RAM or if you have installed the memory component on an unseated module or the RAM itself is bad which needs to be replaced.

Why are my games closing by themselves?

Poor memory management is one of the most common reasons for app or game crashes on mobile devices, especially for low-end mobiles and tablets. There may insufficient storage space for apps to run smoothly, especially if you have multiple applications running at the same time in the background.

What Is A Chromebook & Should I Buy One?

At first glance, a Chromebook looks very much like a typical Windows laptop, but there are significant differences between the two. The term Chromebook (as opposed to ‘notebook’, which many people use to refer to Windows laptops) is there to denote that the laptop runs the ChromeOS operating system from Google.

This has been around for about a decade now, and you can read more about their history in our 10 years with ChromeOS feature. It puts a focus on using online apps rather than installing them on your hard drive as you do with Windows and macOS. 

So, does this mean that a Chromebook is some weird specialist device that can’t run the apps you need? Yes and no. It’s easiest to think of a Chromebook as a web browser. So anything you can do online, you can do on a Chromebook. 

If you’ve used the Chrome web browser (and who hasn’t?), then the layout and interface will feel very familiar. Plus, it’s worth remembering that so much of what we do on laptops these days is often already done in a browser (online shopping, streaming music and video, social media) or held online (cloud storage, email, photo libraries, etc.). 

Many Windows programs, including Microsoft Office, have web versions you can use on Chromebooks, and on modern Chromebooks you can also install and run Android apps, which opens up a lot more uses.

One of the most helpful aspects of this approach is that all you need is your Google account details to use a Chromebook. Logging in will give you access to all your apps and data, then if you move a new Chromebook you won’t have to back up your files and move them across. Simply log into the new one and all of your stuff immediately appears. It’s so easy. For more details read how to set up a Chromebook. 

ChromeOS is a stripped back operating system that is fast, simple to use, and works brilliantly for online activities. Chromebooks are the devices on which this software runs. 

What can you do with a Chromebook?

As mentioned above, Chromebooks are great for doing stuff online. Whether it’s ordering your weekly grocery shop, checking the latest headlines, hanging out on Facebook or Twitter, video calling your family, binging a new series on Netflix, attending online classes or pretty much anything else you’d normally do in a browser on your existing tablet, smartphone or computer. 

They are also very good for office/admin-style duties, with the free Google Docs, Sheets and Slides apps giving you access to all the basic capabilities you’d find on the MS Office equivalents. 

If you use Gmail, then it’s built right into ChromeOS (not surprising as Gmail is one of Google’s services), so you can organise your communications, plus there are also apps for Messages (the Android messaging app), WhatsApp, Slack and others. Of course, most email services allow you to access messages in a web browser. 

You may have seen a pattern emerging here: if you use Google apps, then Chromebooks will feel a very natural fit. Also, if you have an Android phone (especially the Google Pixel range), then again you’ll find that the two will work well together. 

Chromebooks have become very popular with schools, as they are generally affordable, easy to manage, and give kids all they need to accomplish educational-based tasks. They are also a good choice for people who don’t really get on with technology too well. If your ageing parent is looking for a new laptop, then a Chromebook could be an excellent option, especially if you’re going to be the one offering technical support. 

Not designed for serious gaming

Not ideal for creatives

Well, if you want to use a specific application then it might not be available on ChromeOS. For example, those who create music, video or graphical content will find the limitations of online services too much, and none of the stalwarts like Logic Pro, Photoshop or Adobe Premiere are available for Chromebooks. 

Gamers will be able to use Android apps, but this isn’t ideal due to the form factor, plus it won’t be anywhere near as good a proper Windows gaming laptop with their powerful GPUs,  processors, and huge choice of AAA games. You can use Nvidia’s GeForce streaming service on Chromebooks though, which does make them more attractive to gamers than in the past. 

Also, if you need a full-blown version of Microsoft Word or Excel, with all the bells and whistles, then again you’ll be out of luck. But, Chromebooks are not aiming for those kind of users. Creative professionals and gamers are already well catered for and heavy-duty Office proponents will always fare better with a powerful Windows PC. 

For everyone else though, who just wants a laptop-style device for administrative tasks, web use, streaming, social media and video calls, a Chromebook has pretty much everything you need.

If you’re interested in a more direct comparison, read Chromebook vs Laptop. 

Can I use a Chromebook offline?

This can be a bit hit and miss. External hard drives, thumb drives, and other storage media usually work without a hitch, as Chromebooks recognise pretty much all of the major file types and formats. Printers can be more problematic, but if they are WiFi enabled you should be ok. 

As for Bluetooth speakers, keyboard and mice, they are usually very happy to play with Chromebooks. Google also announced a Works with Chromebook program in 2023, so you can know immediately whether accessories are compatible. 

If you’ve read all of the content above and feel that a Chromebook could work for you, then we’d certainly recommend you try one out. So long as you acknowledge the limitations of the platform (primarily online, won’t have all the Windows/macOS software, more suited to Android smartphones than iOS), then we think you won’t be disappointed.  

With Chromebooks growing in popularity, there are now quite a few different models to choose between. To simplify this, take a look at our guide to the

Getting Your Clustering Right (Part I)

Clustering is one of the toughest modelling techniques.

It takes not only sound technical knowledge, but also good understanding of business. We have split this topic into two articles because of the complexity of the topic. As the technique is very subjective in nature, getting the basics right is very critical.

This article will take you through the basics of clustering. The next article will get into finer details of the technique and identify certain scenarios where the technique fails. The article will also introduce to a simple method to counter such scenarios.

[stextbox id=”section”]What is clustering analysis?[/stextbox]

Clustering analysis is the task of grouping a set of objects in such a way that objects in the same group (called a cluster) are more similar (in some sense or another) to each other than to those in other groups (clusters). Following figure is an example of finding clusters of US population based on their income and debt :

It is one of the subjective modelling technique widely used in the industry. One of the examples of common Clustering usage is segmenting customer portfolio based on demographics, transaction behavior or other behavioral attributes.

[stextbox id=”section”]Why do we need clustering ?[/stextbox]

Hence, clustering is a technique generally used to do initial profiling of the portfolio. After having a good understanding of the portfolio, an objective modelling technique is used to build specific strategy.

[stextbox id=”section”]Industry standard techniques for clustering :[/stextbox]

There are a number of algorithm for generating clusters in statistics. But we will discuss in detail only two such techniques which are widely used in the industry. These techniques are as follows :

1. Hierarchical Clustering : This technique operate on the simplest principle, which is data-point closer to base point will behave more similar compared to a data-point which is far from base point. For instance, a , b ,c, d, e,f are 6 students, and we wish to group them into clusters.

Hierarchical Clustering will sequentially group these students and we can stop the process at any number of clusters we want. Following is an illustrative chain of clustering :

Hence, if we want 3 clusters, a , bc and def are the required clusters. So far so simple. The technique uses the very basic of clustering and is, therefore, a very stable technique.

The only problem with the technique is that it is able to only handle small number of data-points and is very time consuming. This is because it tries to calculate the distance between all possible combination and then takes one decision to combine two groups/individual data-point.

2. k-means Clustering : This technique is more frequently used in analytics industry as it is able to handle large number of data points. FASTCLUS is an algorithm used by SAS to generate k-means cluster. Lets try to analyze how it works.

As can be seen from the figure above, we start with a definite number for the number of required cluster (in this case k=2). The algorithm takes 2 random seeds and maps all other data points to these two seeds. The algorithm re-iterates till the overall penalty term is minimized.

When we compare the two techniques, we find that the Hierarchical Clustering starts with individual data-points and sequentially club them to find the final cluster whereas  k-means Clustering  starts from some initial cluster and then tries to reassign data-points to k clusters to minimize the total penalty term. Hence for large number of data-points,   k-means uses far lesser iterations then Hierarchical Clustering.

[stextbox id=”section”]Steps to perform cluster analysis:[/stextbox]

Having discussed what is clustering and its types, lets apply these concepts on a business case. Following is a simple case we will try to solve :

US bank X wants to understand the profile of its customer base to build targeted campaigns.

Step 1 – Hypothesis building : This is the most crucial step of the whole exercise. Try to identify all possible variables that can help segment the portfolio regardless of its availability. Lets try to come up with a list for this example.

a. Customer balance with bank X

b. Number of transaction done in last 1/3/6/12 months

c. Balance change in last 1/3/6/12 months

d. Demographics of the customer

e. Customer total balance with all US banks

The list is just for illustrative purpose. In real scenario this list will be much longer.

Step 2 – Initial shortlist of variable : Once we have all possible variable, start selecting variable as per the data availability. Lets say, for the current example we have only data for Customer balance with bank X and Customer total balance with all US banks (total balance)

Step 3 – Visualize the data : It is very important to know the population spread across the selected variable before starting any analysis. For the current scenario, the exercise becomes simpler as the number of selected variables is only 2. Following is a scatter plot between total balance and Bank X balance (origin taken as mean of both the variables):

This visualization helps me to identify clusters which I can expect after the final analysis. Here, we can see there are four clear clusters in four quadrants. We can expect the same result in the final solution.

Step 4 – Data cleaning : Cluster analysis is very sensitive to outliers. It is very important to clean data on all variables taken into consideration. There are two industry standard ways to do this exercise :

1. Remove the outliers : (Not recommended in case the total data-points are low in number) We remove the data-points beyond mean +/- 3*standard deviation.

2. Capping and flouring of variables : (Recommended approach) We cap and flour all data-points at 1 and 99 percentile.

Lets use the second approach for this case.

Step 4 – Variable clustering :  This step is performed to cluster variables capturing similar attributes in data. And choosing only one variable from each variable cluster will not drop the sepration drastically compared to considering all variables. Remember, the idea is to take minimum number of variables to justify the seperation to make the analysis easier and less time consuming. You can simply use Proc VARCLUS to generate these clusters.

Step 5 – Clustering : We can use any of the two technique discussed in the article depending on the number of observation. k-means is used for a bigger samples. Run a proc fastclus with k=4 (which is apparent from the visualization).

 As we can see, the algorithm found 4 clusters which were already apparent in the visualization. In most business cases the number of variables will be much larger and such visualization won’t be possible and hence

Step 6 – Convergence of clusters : A good cluster analysis has all clusters with population between 5-30% of the overall base. Say, my total number of customer for bank X is 10000. The minimum and maximum size of any cluster should be 500 and 3000. If any of the cluster is beyond the limit than repeat the procedure with additional number of variables. We will discuss in detail about other convergence criterion in the next article.

Step 7 – Profiling of the clusters : After validating the convergence of cluster analysis, we need to identify behavior of each cluster. Lets say we map age and income to each of the four clusters and get following results :



Now is the time to build story around each cluster. Lets take any two cluster and analyze.

Cluster 1 : (High Potential Low balance customer) These customers do have high balance in aggregate but low balance with bank X. Hence, they are high potential customer with low current balance. Also the average salary is on a higher side which validates our hypothesis of customer being high potential.

Cluster 3 : (High Potential high balance customers) Even though the salary and total balance in aggregate is on a lower side, we see a lower average age. This indicates that the customer has a high potential to increase their balance with bank X.

[stextbox id=”section”]Final notes :[/stextbox]

As we saw, using clusters we can understand the portfolio in a better way. We can also build targeted strategy using the profiles of each cluster. In the Part 2 of this article we will discuss following :

1. When is cluster analysis said to be conclusive?

2. Different scenarios in which each of the two techniques dominate?

3. When do both techniques fail?

4. Step by step solution in a scenario when both the techniques fail.

Read Part 2 here

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Related

Should I Invest In Influencers To Find New Customers?

Influencer marketing is not a relatively new term in the marketing world but its popularity has resurged thanks to social media and it’s easy to see why. For years, brands have struggled to solve the promotional component of their marketing strategy and find reliable brand ambassadors who can promote their products. The result of great influencer campaigns can pack a serious punch and help you find new customers while gaining legitimate brand exposure. The technology and resources surrounding influencer marketing have drastically evolved over the past few years and it is now a legitimate marketing strategy to consider.

Is Influencer Marketing Worth It?

The internet created a complete shift in the way influencers reach audiences and the engagement metrics reveal the ROI that was never measurable before. Now that an influencer’s reach and your investment is measurable through a variety of data reports, influencer marketing is worth considering if your business offers a unique brand, experience, or product. But be warned, influencer marketing can be a huge waste of resources, budget, and time so it’s important to make it the best marketing tactic you’ve ever used. Great influencer marketing campaigns come down to two things: smart decision making and collaborating with the right people.

How Can I Find The Right Influencer For My Business?

Finding the right influencers at the right price can be a difficult task so it is important to be cautious about who you are associating with your business. Social media profiles and the number of followers someone has can be easily manipulated or inflated with fake audience members. Many individuals on social media choose to purchase likes or followers to make themselves appear influential and end up wasting a brand’s money. So how are you going to find legitimate influencers who can grow your business? Well to prevent you from getting duped, here are a few things to look out for when researching influencers.

How To Spot A Fake Influencer Checklist:

#1 Evaluate Their Engagement Levels

Looking at engagement rates will help you determine if their audience is legitimate and full of potential customers. If you see several profiles with a strange handle (aka the profile name), a large number of followers, limited content, and even fewer likes, that’s a red flag. This usually means those followers and likes have been purchased from a shady service selling fake engagement from a bot account. Avoid using accounts with these kinds of followers because it will only waste your time and hurt your marketing budget.

#2 Perform A Google Search

Grab your Sherlock Holmes costume from last Halloween because you’re going to become a detective. We can’t go a day without entering in a search query so why not perform some research on your prospective influencers? By searching the influencers name, social media handle, and the brands they’ve worked with in the past, this can give you a great idea of who they are how they do business. You may also uncover blog posts and other forms of content that can help you decide if they’re the right fit for your business.

#3 Ask For References  

It’s not up to the influencer to determine how valuable they are to you so don’t be afraid to ask for a reference or to see their results from a past campaign. If you’re going put in the effort and associate this person with your products or services, make sure that their influence is going to work for your business. Remember, a good influencer can tell you how many followers and likes they have, but a great influencer will show you a variety of engagement levels and data points to describe how much traffic was generated from their posts to an external site.

With these filters, you can verify an influencer’s legitimacy before engaging in a collaboration. The campaign strategy, terms, and fees are the next things to take care of, but for now, you can be happy knowing that you’re definitely not getting ripped off.

I’m Struggling To Find Influencers For My Industry

If you’re struggling to locate the right influencers for your business then let us introduce you to our friends at Find Your Influence (FYI). We sat down with Samantha Ley, the Director of Client Development, to find out more about how FYI’s platform and managed services help connect brands with influencers.

VM: How does FYI connect brands with influencers?

SL: FYI uses our SaaS influencer marketing platform to connect notable brands with a variety of influencers. It is our goal to work with brands, pair them with the right influencers, and deliver great results. We recognize that no two digital marketing campaigns are the same so we also offer our team of expert marketers to help you manage the influencers. Our network of influencers and brands have been curated and categorized by industry experts who use more than 25 data points to evaluate the influencers and their audience. Because we have a great network of influencers, we don’t bother with bots and are solely focused on providing results.

VM: What can brands expect when they subscribe to the FYI platform?

SL: When you work with an influencer from the FYI network, you know that you’re getting the real deal. We work with creative thought-leaders that have a history of driving results and increasing engagement for brands. The main benefit of FYI is our platform, which was the first of its kind and we’ve been relentless in fine-tuning our technology. You will also receive the benefits of great customer service and our 500+ brands are thrilled with their results.

VM: How much should brands pay for an influencer?

SL:  We take a very realistic approach to influencer marketing and that means working with budgets of all sizes and influencers from across the globe. Just like any other marketing tactic, there is an investment and an extremely limited budget can stunt the potential of your campaign. We’re constantly adding a variety of influencers to our network so we always have the right people at the right price point for your brand.

Looking for more information about Find Your Influence?

Request a demo and find your influencers today

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Here’s The Deal

So to answer your question, is influencer marketing worth it? When done correctly, the answer is yes and you probably have to use influencers in at least one marketing channel if you want your brand to remain relevant with potential customers. But much like the California Gold Rush of 1849, it’s attracting everyone and influencer marketing is making some business boom while others are a total bust.

If you’re not ready to commit to a social media agency the best way to protect yourself from dishonest social media users is to become social media savvy. Follow your competitors, follow people you meet through networking, do the research, and approach influencers with a plan. Developing a measurable goal and educating yourself will help you stay on top of your influencers and help make your social campaign is a success.

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