What is Data Mining?
Data mining, also referred to as data or knowledge discovery, is the process of analyzing data and transforming it into insight that informs business decisions. Data mining software enables organizations to analyze data from several sources in order to detect patterns. With the volume of data available today, organizations turn to Big Data management solutions and customer experience management solutions capable of advanced data mining for translating raw data into actionable insights.
Uses of Data Mining
Customer-centric companies, such as those in retail, finances, communication, and marketing, are the primary users of data mining tools and processes. With data mining, these organizations identify relationships between price, product, economic indicators, customer demographics, and more. Data mining enables organizations to then determine the impact on sales, customer satisfaction, and corporate profits.
Data mining is the key to gaining a competitive edge. As Neil Patel, VP of KISSmetrics points out, data mining delivers the necessary insights for increasing customer loyalty, unlocking hidden profitability, and reducing client churn. Patel also highlights the ten most common ways to use data mining:
- Basket analysis
- Sales forecasting
- Database marketing
- Merchandise planning
- Card marketing
- Call detail record analysis
- Customer loyalty
- Market segmentation
- Product production
Patel reminds readers that collecting more customer data equates to generating more revenue because data mining allows you to deliver more value to customers by knowing more about them.
Benefits of Data Mining
The data mining process includes reporting and analysis. Data-driven marketers are wise to remember that they need to utilize reporting and analysis as two separate parts of the whole data mining process, so that they are able to make data-driven marketing decisions rooted in the insights gained from both reporting and analysis.
Only when organizations mine their data properly do they gain greater visibility into customer behavior through more comprehensive customer profiles on an individual level. Top data mining solutions enable organizations to learn from every customer interaction, gain behavior and contextual information more quickly, create more effective actionable insights, and execute more intelligently on the insights to find, optimize, and engage targets.
The most important step an organization can take in terms of data mining is to take advantage of the opportunities afforded by it. Collect data and put it to good use with data mining, and you’ll soon start reaping the benefits:
- More money – Learn which types of products customers have purchased and capitalize on that insight to personalize experience, increase customer loyalty, and boost customer lifetime value
- Improve branding and marketing – Get feedback and employ data mining to identify what is working and what isn’t with branding and marketing
- Streamline outreach – Make all of your outreach more timely and relevant with data mining
- Tap into new markets – Use other databases to identify potential customers and conduct relevant outreach
- Learn from the past – Compare current data to past information to find trends to keep in mind when making business decisions
With advanced data mining software solutions, including Big Data management solutions and customer experience management solutions, data mining provides a clear competitive advantage. The power to transform the customer experience with relevant, targeted, and personalized interactions, as well as the ability to boost your bottom line through strategic, informed decision-making, lies in your data mining practices.
For more information on data mining, check out these articles and resources: