Nowadays, there are numerous methods for analyzing data, one of which is cluster analysis. Because most practical data in today's analysis contains categorical attributes, categorical data clustering has recently received a lot of attention. To cluster categorical data, unsupervised machine learning techniques, which used frequency-based method, such as K-Mode’s clustering are used. The K-Modes algorithm takes advantage of the differences between the data points (total mis-matches or dissimilarities). The lower the dissimilarities, the more similar the data points, and thus the better the cluster. This paper aims to improve K-Mode’s clustering performance by incorporating the intercluster and intracluster dissimilari-ty measure, or IID measure, into the K-Modes algorithm rather than just using the standard simple-matching method to increase the algorithm's accuracy and execution time. This combined algorithm improves accuracy and execution time of the K-Modes algorithm. As a result, this algorithm can be used as an alternative to better cluster categorical data.