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Supervised Vs Unsupervised Learning

This document discusses supervised and unsupervised machine learning. Supervised learning uses labeled training data to build a predictive model that maps inputs to outputs, while unsupervised learning looks for hidden patterns in unlabeled data. Some examples of supervised learning applications include predicting customer churn, risk assessment, and targeted advertising. Unsupervised learning is used for applications like customer segmentation and anomaly detection.

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Mohammad Salim khan
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93 views

Supervised Vs Unsupervised Learning

This document discusses supervised and unsupervised machine learning. Supervised learning uses labeled training data to build a predictive model that maps inputs to outputs, while unsupervised learning looks for hidden patterns in unlabeled data. Some examples of supervised learning applications include predicting customer churn, risk assessment, and targeted advertising. Unsupervised learning is used for applications like customer segmentation and anomaly detection.

Uploaded by

Mohammad Salim khan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Supervised

vs Unsupervised Learning

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Content
• Machine Learning
• Supervised Learning
• Unsupervised Learning
• ML Applications

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Learning Objectives
• Why Machine Learning?
• What is Machine Learning?
• What is Supervised Learning?
• Applications of Supervised Learning?
• What is Unsupervised Learning?
• Applications of Unsupervised Learning?

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Why Machine Learning?
• Why Machine Learning?
• Everyone like to know the Future
• Adapt and learn fast with changing scenario
• Act fast with changing data

• What is Machine Learning?


• An algorithm that learns from data, identifies
patterns in data and store the learnings in
form of a Model
• Apply the Model to predict on new data
• It has the ability to quickly change, refresh,
and enhance the Model with changing data
and newer datasets

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Simple Business Scenario
Scenario
Let us assume you are working in a Bank and the Chief Marketing
Officer suggests that he wish to run a campaign to promote a financial
product, say, some Investment Product

Based on business filters, you have an eligible contactable base of


1,000,000 customers.
Cost of Targeting each customer being Rs. 10/-
It is expected that 0.5% incremental customers will purchase the
Investment Product because of the campaign
Expected Revenue per customer who purchases the product is Rs.
2500/-

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Campaign Return on Marketing Investment
without Analytical Approach
• Target Customer Base : 1,000,000
• Cost of Targeting per customer : INR 10/-
• Cost of Campaign = 1,000,000 * 10 = INR 10,000,000 = 10 Mn
• Expected Incremental Conversion Rate : 0.5%
• Expected Incremental Conversions = 1,000,000 * 0.5% = 5,000
• Expected Revenue per Convert : INR 2500/-
• Expected Incremental Revenue = 5,000 * 2500 = 12,500,000 = 12.5
Mn
• Expected Profit = 12.5 Mn – 10 Mn = 2.5 Mn

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Campaign ROMI

Return on Revenue – Cost 12.5 - 10


Marketing = ----------------------- = -------------------- = 25%
Investment (ROMI) Cost 10

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Analytics Based Approach

High Response Segment


25% of Base
With expected conversion rate of 1.3%

Medium Response Segment


25% of Base
With expected conversion rate of 0.4%

Low Response Segment


50% of Base
With expected conversion rate of 0.15%

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Analytics Based ROMI
Note: Cost of Targeting per customer : INR 10/- ; Expected Revenue per Convert : INR 2500/-

Exp. Conv. Cost of Exp.


# Customer # Conv’s Profit ROMI
Rate Targeting Revenue
Segment
(E = C *
(A) (C = A * B) (F = E – D) G=F/D
(B) (D = A * 10) 2500)
High
Response 250,000 1.3% 3250 2,500,000 8,125,000 5,625,000 225%
Segment
Medium
Response 250,000 0.4% 1000 2,500,000 2,500,000 0 0%
Segment
Low
Response 500,000 0.15% 750 5,000,000 1,875,000 -3,125,000 -ve
Segment

Total 1,000,000 0.5% 5000 10,000,000 12,500,000 2,500,000 25%

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Recommendation to CMO

Your recommendation to the CMO:

• Target only the High Response Segment

Benefits of your strategy

A) It will reduce Marketing Cost by 75%

B) It will increase Profits by 125%

C) 9X increase in ROMI

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Supervised
vs Unsupervised Learning

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Machine Learning Techniques Categories
 Supervised learning is the Machine Learning task of
finding a function from a Labeled Data
 Labeled Data is a dataset which has Independent
Variable/s and a Dependent Variable

 Unsupervised learning is the Machine Learning task


of exploring the data to derive some inferences /
insights from the dataset
 The “Target Variable” or the “Labeled Class” is not
present in the Unsupervised Learning dataset

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Supervised Learning

Input
D Attributes Supervised
A
Learning
Predictive Predicted
T
A Desired Technique Model Output
Output

• Supervised Learning Techniques


• Classification
• Regression

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UnSupervised Learning

Input Unsupervised

Data
Learning Output
Technique

• UnSupervised Learning Techniques


• Dimension Reduction Techniques like PCA, Factor Analysis
• Clustering
• Association Analysis

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Application of Supervised Learning
• Assume you are working in a bank (say MyBank)
• The Chief Marketing Officer has assigned you the task of
growing the Personal Loans Portfolio by cross-selling the
loans to existing Customers
• Data of past promotional campaigns and offers sent to the
Customers, their behavioural data and those who took the
loan is all available with you

• This is an example where Supervised Learning can be


applied

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Marketing Modeling Dataset
• Sample Predictive Modeling Dataset

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Some e.g. of Supervised Learning Applications
Industry /
Supervised Learning Technique Applications Labeled Class
Vertical

HR To predict whether a good employee is likely to resign or not Resign / Not-Resign

Telecom To classify customers who are likely to be Churners Churn / Not-Churn

Retail / To find potential customers from churned base who can be won back Win-back Yes / No
Ecommerce again

Banking To build a model that will help assign the probability to a customer to Respond / Not-
take a product / service Respond

Insurance To build a model to assess the likelihood of customer not renewing his / Lapse / Not-Lapse
her policy

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Application of UnSupervised Learning
• Assume you are working in a Retail Company
• You have 1 Mn Loyalty Members
• You have been asked to segment them based on their Buying
Behaviour Pattern

• This is an example of UnSupervised Learning Application

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Clustering Modeling Dataset
• Sample Clustering Modeling Dataset

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Thank you

Contact us:
[email protected]

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