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The factor transformation matrix describes the specific
rotation applied to your factor solution. This matrix is used
to compute the rotated factor matrix from the original
(unrotated) factor matrix.
Smaller off-diagonal elements
correspond to smaller rotations.
Larger off-diagonal elements
correspond to larger rotations.
The third factor is largely unaffected by the rotation, but
the first two are now easier to interpret.
The first rotated factor
is most highly correlated with
Toll free last month,
Caller ID,
Call waiting,
Call forwarding, and
3-way calling.
These variables are not particularly correlated with the
other two factors.
The second factor is most highly correlated with
Equipment last month,
Internet, and
Electronic billing.
Thus, there are three major groupings of services, as defined
by the services that are most highly correlated with the three factors.
Given these groupings, you can make the following observations about
the remaining services:
Because of their moderately large correlations with both the first and second factors,
Wireless last month,
Voice mail, and
Paging service
bridge the "Extras" and "Tech" groups.
This suggests avenues for cross-selling. For example, customers who subscribe to extra services may be more predisposed to accepting special offers on wireless services than Internet services. The factor loadings plot is a visual representation of the rotated factor matrix. If the relationships in the matrix are complex, this plot may be easier to interpret. |
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Rotated Factor Matrix |