AI-DRIVEN CUSTOMER SEGMENTATION AND PERSONALIZATION

Abstract

In today's highly competitive marketplace, understanding and meeting customer needs is paramount. Artificial Intelligence (AI) has emerged as a transformative tool for customer segmentation and personalization, enabling businesses to deliver highly targeted and relevant experiences. This paper explores the integration of AI techniques, such as machine learning, natural language processing, and predictive analytics, to enhance customer segmentation and personalization. By analysing vast amounts of customer data, AI can identify distinct customer segments and predict future behaviours, facilitating personalized marketing strategies that improve customer engagement and loyalty. The study examines various applications across industries, including retail, finance, healthcare, and tourism, demonstrating how AI-driven personalization can drive business success. Additionally, it addresses the ethical considerations, data privacy concerns, and challenges associated with implementing AI technologies. Through case studies and empirical research, the paper highlights the impact of personalized experiences on customer satisfaction and retention and discusses the potential for future advancements in AI-driven marketing. The findings suggest that while AI offers substantial opportunities for enhancing customer experiences, businesses must navigate data quality, integration, scalability, and privacy issues to fully leverage its capabilities. This research contributes to the growing body of knowledge on AI in marketing and provides actionable insights for practitioners aiming to implement AI-driven customer segmentation and personalization strategies.