Top 8 Applications of Machine Learning in Business
Machine learning (ML) algorithms are used by many of today’s top companies. It is used to better understand their consumers and their earning potential. Companies in virtually every industry use a variety of machine learning technologies.
For example, healthcare industries use ML business applications to get more accurate diagnosis. They also use ML for better treatment of their patients. Medical researchers are not left behind when it comes to embracing machine learning, as many of them are using it to develop better and more effective drugs.
Machine learning is also being used by retailers to get the right items and products to the right outlets before they run out of stock. ML is also used in logistics, manufacturing, hospitality, travel and tourism, energy, and utilities.
But how do these industries apply machine learning in their fields? This article discusses some of the most common machine learning applications used by businesses.
The Top Eight Business Applications of Machine Learning
Can be used to create chatbot systems for customer support
One of the most common applications of ML and artificial intelligence (AI) is chatbots. Chatbots have bridged the gap between humans and technology by allowing us to talk with machines. These machines carry out activities according to the needs or requests expressed by people.
Chatbots use machine learning and natural language processing (NLP), both of which are part of the AI technology body. Examples of chatbots are Alexa, Google Assistant, Siri and Watson Assistant.
Additionally, chat platforms on passenger request services are just a few notable examples of modern chatbots. Chatbots guarantee 24/7 services to customers. It allows us to respond to customer requests.
Used as recommendation engines
Customer recommendation engines use ML to create personalized experiences. It is also used to improve the overall customer experience. Recommendation engines use ML models based on huge amounts of data.
This data includes the customer’s past purchases as well as other data sets such as demographic trends. It also includes an organization’s current inventory and customer purchase histories
After which, the deployment of the ML model is performed to predict the likelihood of a customer buying something or liking content. The ML model can then be maintained by machine learning operations (MLOps).
As a result, customers get a better experience that motivates them to stay longer and minimizes turnover. A well-known recommendation engine is the Netflix recommendation engine.
Modeling customer churn
Customer churn modeling can help you determine which of your customers are most likely to abandon your business and why. Companies also use ML models to detect when a customer’s loyalty is dwindling and devise methods to remedy the situation.
ML algorithms can locate and analyze the reason behind a company losing consumers. This is done by identifying trends in huge amounts of sales, historical and demographic data.
ML models are first trained on customer data. They can be stored in model registers after training. Then, the model deployment is performed to predict the churn rate. After what model monitoring is necessary.
The output of a churn model can range from churn risk scores for individual customers to a list of the most important churn factors. These results are crucial for an algorithmic loyalty strategy since they contribute to the optimization of discount offers. They also facilitate other targeted marketing activities that entice your high-value customers to buy.
For price analysis
ML summarizes and analyzes a variety of factors, such as market demand, consumer habits, competitor actions, etc. These ratings help managers design the best pricing strategies for their businesses.
ML algorithms can learn from this data and integrate it with additional customer and market data. This will help businesses dynamically price their items in response to a wide range of factors. This allows them to maximize their earnings.
This technology is used by Uber and Lyft to adjust their rates according to different periods and circumstances (peak times, holidays, bad weather, etc.).
For fraud detection
ML’s ability to identify patterns and recognize anomalies makes it a tool for detecting fraudulent activity. ML algorithms such as support vector machines (SVM) are very effective in detecting fraud.
In fact, financial sector organizations have been effectively applying ML in this area for years. Other industries that use ML in fraud detection are retail, gambling, travel, and financial services.
For analysis and customer research
ML business applications not only help organizations set prices, but also deliver the right goods and services at the right time through consumer segmentation and market research.
Retailers, for example, use ML to anticipate which products will sell the most in each of their stores. This may be based on seasonal circumstances impacting that store and the demographics of that area. And other data sources such as hot news on social media
ML models also help in customer segmentation, which helps categorize buyers based on various factors. These factors include shopping habits, average money spent on a single transaction, credit card health, and more.
ML models also help in modeling the lifetime value of a customer. This is done by predicting future revenue and visitor loyalty based on their in-store shopping behavior.
. To boost business efficiency
Many companies use ML technology to help them manage ordinary business activities such as software development and financial transactions. ML is used by various departments in the company to increase productivity. Examples of such departments are operational teams, finance companies and departments. For example, IT departments can use ML as part of their software testing automation. This will help increase and significantly improve the process.
Improved decision making
Another area where ML can help businesses is converting large amounts of data into actionable and valuable insights. Algorithms trained on various relevant data sets and historical data can evaluate the information.
It can also analyze countless different scenarios at a size and pace difficult for humans to determine the optimal course of action. It can help build decision support systems who are employed in a variety of industries including healthcare, etc.
More and more companies are trusting ML to help them with their performance. Indeed, ML increases accuracy and eliminates errors. ML also speeds up the work process and makes the customer and employee experience more enjoyable.
That’s why more and more forward-thinking companies are using ML to create new business insights. They use ML to differentiate their brand in the market.