This report examines the problems of customer relationship management (CRM) particularly customer segmentation and customer profiling, and how data mining tools are used to support the decision making. We first describe the steps towards predicting customer's behavior, such as collecting and preparing data, segmentation and profile modeling. Then, we present a general overview of most used data mining methods including cluster discovery, decision trees, neural networks, association rule and sequential pattern discovery. The report also covers a discussion about Web mining which is treated as a separate section due to its current popularity in electronic commerce. A guideline to choose a data mining software package is also given in the last section.

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