The goal of classification is to build rules or models and represent them in a simple readable form using past decisions. There are multiple techniques that can accomplish this task of gleaning intelligence from existing data – Neural Networks, SVMs, Decision Trees and so on.

Clustering is the task of grouping a set of objects so that objects in the same group are more similar to each other than objects in another group.  Well, now that the formal definition is through, we can get down to brass tacks – just replace the term objects in the definition with “customers “ and we’ll be on our way.