This use case showcases how Machine Learning can help you understand your customers to better develop personalized relationships. The lecturer is Arturo Moreno, Associate Professor at ICADE Business School, and a technology entrepreneur, investor, and innovative leader working on the intersection of venture capital and Machine Learning.
*Machine Learning School for Business Schools 2021: Virtual Conference.
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BigMLSchool: Customer Segmentation
1. Arturo Moreno #BigMLSchool ICADE
February 17, 2021
Customer Segmentation: Understanding Your
Customers to Better Develop Personalized
Relationships
BigML Machine Learning School
2. Arturo Moreno #BigMLSchool ICADE
Welcome
print ("Welcome to BigML Machine
Learning School!")
Output:
Welcome to BigML
Machine Learning School!
3. Arturo Moreno #BigMLSchool ICADE
About me
Associate Professor Business Analytics at ICADE Business School
Twitter:
@r2_moreno
Clubhouse:
@r2moreno
4. Arturo Moreno #BigMLSchool ICADE
About me
Disclaimer
I think the BigML team are great experts and that they have built a top-class
machine learning platform.
I have worked with BigML in the past and love them.
Now, everything that I share with you is my honest assessment of the value of
BigML as a tool to teach machine learning at business schools.
5. Arturo Moreno #BigMLSchool ICADE
Agenda
My perspective on teaching ML
• Setting (the right) expectations for the course
• Theoretical background + hands-on experience (for managers)
• BigML at the core of my teaching experience
• Case Study – Clustering for better understanding your customers
• Questions? Google Meet and Slack channel
6. Arturo Moreno #BigMLSchool ICADE
1. Approach business problems data-analytically
• Think carefully & systematically about whether & how data can improve
decision performance
2. Be able to interact competently on the topic of data mining for business
analytics
• Know the basics of data mining processes, techniques, & concepts well
enough
3. Live hands-on experience applying ML models
• You should be able to follow up on ideas or opportunities that present
themselves
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Setting (the right) expectations for the course
The goal for the class is three-fold
7. Arturo Moreno #BigMLSchool ICADE
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Setting (the right) expectations for the course
Data-related jobs are in explosive demand
Source: Indeed
8. Arturo Moreno #BigMLSchool ICADE
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Setting (the right) expectations for the course
And Schools have already / are in the process of adapting
Source: Indeed
9. Arturo Moreno #BigMLSchool ICADE
Setting (the right) expectations for the course
Importance of Business Analytics
Source: McKinsey&Co.
10. Arturo Moreno #BigMLSchool ICADE
Setting (the right) expectations for the course
Importance of Business Analytics
Assortment
optimization
Next-product-
to-buy mailing
Promotion
optimization
Inventory
management
Real-time
advertising
Shopper
segmentation
Shopper
loyalty/
Churn
Source: McKinsey&Co.
11. Arturo Moreno #BigMLSchool ICADE
1. Not a computer science class. I don’t expect students to program, so
implementation won’t be covered in the class.
2. Not a Math class either. We explore just enough in order for you to
understand the concept. (i.e.: entropy of a dataset or “distance” between two
elements,…)
3. Not a course on big data technologies (data engineering and data
processing)
But also, ML education must stay away from an existing ML-charlatan trend.
Above all, it’s our duty to teach to use data with responsibility. (i.e.: stay away
from low-quality processes around data, models or evaluation)
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Setting (the right) expectations for the course
The NO-goal for this class is three-fold
12. Arturo Moreno #BigMLSchool ICADE
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Setting (the right) expectations for the course
What should be the goal for business students?
• Improve decision making?
• Build well “performant” models?
• Deploy models of all kinds supervised or unsupervised?
• Make sure there is as much data as possible?
• Ok… Just throw millions and hire thousands of developers and let data for
the data scientists!?
• … Other?
13. Arturo Moreno #BigMLSchool ICADE
Setting (the right) expectations for the course
Cross Industry Standard Process for Data Mining (CRISP-DM; Shearer, 2000)
Industry average is that ~
80% of the time of any data
science project is spent
here.
There is a lot of domain
expertise required but
basic data transformation
skills.
This is the ideal territory for
business students to
participate
Source: Data Science for Business – Foster, Provost
14. Arturo Moreno #BigMLSchool ICADE
Setting (the right) expectations for the course
Develop the habit of data understanding
15. Arturo Moreno #BigMLSchool ICADE
Theoretical background + hands-on experience
• Gather data. Plot data. Hypothesize with data. Infer (if possible) from data.
REPEAT!
• Introduce the data mining process
o The concept
o The role
o The process
o The techniques
• Do that through business examples (real problems, real datasets) to
illustrate type of algorithms and the data mining process
Class structure
16. Arturo Moreno #BigMLSchool ICADE
Theoretical background + hands-on experience
Class project (30%): your first data-mining project
• Groups of 2
• Pick a theme that you are interested in or CHOOSE out of my suggestions
• Final Report delivery and class presentation following the CRISP-DM
methodology
o Business Understanding
o Data Understanding (& Preparation)
o Modeling
o Evaluation
o Deployment
How?: My first data science project
17. Arturo Moreno #BigMLSchool ICADE
Theoretical background + hands-on experience
• Select a problem that you want to work on (your business objective) and
explain why this is relevant for you and who else is interested
• Find the data to work on that problem from the data repositories
• Presentation 1: Evaluation and inspection of the data using BigML, Tableau
and/or Jupyter Notebooks.
• Presentation 2: Determining the objective function. Feature generation,
feature selection.
• Presentation 3: Choosing and building the model(s)
• Presentation 4: Evaluation of the model(s). REPEAT!
• Final Presentation: Data Science Project Presentation
My first data science project
21. Arturo Moreno #BigMLSchool ICADE
Theoretical background + hands-on experience
• “If you can’t explain it simply, you don’t understand it well enough” — Albert
Einstein
• We go at a level of detail that students can later explain and question.
• We don't get into technical details, yet deep enough so that students
understand the main questions to be asked related to the why of the
outcomes of models.
1
Focus on understanding what we are doing
31. Arturo Moreno #BigMLSchool ICADE
The Data Mining Process
Cross Industry Standard Process for Data Mining (CRISP-DM; Shearer, 2000)
32. Arturo Moreno #BigMLSchool ICADE
BigML at the core of my teaching experience
Sound theoretical background with business practice
33. Arturo Moreno #BigMLSchool ICADE
BigML at the core of my teaching experience
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1
ACCESS TO DATA: READY-TO-USE DATASETS, SIMPLICITY TO
CONNECT TO EXTERNAL FILES OR DATABASES
2
MODEL CATALOGUE: SUPERVISED AND UNSUPERVISED
MODELS AVAILABLE BOTH 1-CLICK AND CUSTOMIZABLE
3
KEY ML ELEMENTS AT THE CORE: TRAINING-TEST SPLIT,
EXPLAINABILITY FEATURES, CONFUSSION MATRIX
BigML allows me to focus on what matters most for Business students
34. Arturo Moreno #BigMLSchool ICADE
/Case Study – Clustering & Understand customers
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Why are we doing this? Setting the business objective
BUSINESS CASE:
CAN MY CUSTOMER DATA BE USED TO
DEVELOP PERSONALIZED
RELATIONSHIPS WITH MY CUSTOMERS?
35. Arturo Moreno #BigMLSchool ICADE
/Case Study – Clustering & Understand customers
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Let’s see the data. Does it make sense from a business perspective?
36. Arturo Moreno #BigMLSchool ICADE
/Case Study – Clustering & Understand customers
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Analysis of correlations
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/Case Study – Clustering & Understand customers
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On to clustering… [REPEAT]
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/Case Study – Clustering & Understand customers
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Applications and Conclusions
39. Arturo Moreno #BigMLSchool ICADE
/Case Study – Clustering & Understand customers
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Applications and Conclusions
ANY BUSINESS OUTCOME?
DO NOT ACCEPT THE FIRST NICE
SOLUTION, KEEP ITERATING AND
QUESTIONING WHETHER THIS MAKES
ANY SENSE FOR THE BUSINESS.
TEST.