You have customer and insured-pet profiles, policy details, premiums, and claims stored in a relational database. A marketing manager wants to run a targeted social-media campaign to find new potential customers with similar profiles. Which modeling approach is most appropriate to identify distinct customer segments for matching on social media?
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Correct answer: Apply clustering to customer profiles to discover distinct customer segments, then find similar profiles on social media..
Why this is the answer
Clustering is the most appropriate approach because it is an unsupervised learning technique designed to discover inherent groupings or segments within data without prior knowledge of those groups. In this scenario, the goal is to identify distinct customer segments from existing customer profiles. Regression models predict a continuous output and are not suitable for segment discovery. Recommendation systems are designed to suggest items to users based on past behavior or preferences, not to identify inherent customer segments. Decision tree classifiers are supervised learning methods used for classification when target labels are known, which is not the case here as the segments are unknown.
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