Standard customer segmentation is completed by humans manually, but this approach can be inaccurate, lack precision, and can be dependent on many resources. Being able to target specific groups of people within your market can increase your ability to cross-sell and upsell your business products.
Using AI and Machine Learning models, it is possible to determine target groups and re-label data in much reduced time period and with increased accuracy. Algorithms can identify what variables are important to the segmentation and highlight the most important ones. Clustering algorithms like k-means or fuzzy-c-means can be used to get to know similarities in the customer base. With this AI approach, you can increase the probability of a customer buying the product along with increasing brand loyalty due to increased customer satisfaction.