In his excellent podcast episode with EconTalk’s Russ Roberts, psychologist Gerd Gigerenzer introduces the concept of “fast and frugal trees“. When someone needs to make decisions quickly, Gigerenzer says, they don’t take into account a large number of factors, but instead rely on a small set of thumb rules. The podcast itself is based on…
Segmentation and machine learning
For best results, use machine learning to do customer segmentation, but then get humans with domain knowledge to validate the segments There are two common ways in which people do customer segmentation. The “traditional” method is to manually define the axes through which the customers will get segmented, and then simply look through the data…