How Data Mining Can Turn Contacts into Gold
Our team at Joseph Studios recently arranged a workshop about data mining and how it helps with marketing.
Here are the brief findings of the workshop:
What Is Data Mining?
In simple terms, data mining means to collect chunks of useful data from an otherwise larger set of raw data. The concept of data mining also implies using data and analyzing it to identify patterns in larger sets of data.
Data Mining is also known as KDD, which stands for Knowledge Discovery in Data. The process of uncovering different trends, common themes, and patterns in big data is also referred to as KDD or Data Mining.
An early form of data mining was when companies used to analyze huge amounts of scanner data in supermarkets.
You Can Segment Your Customers
Instead of targeting your customers on one large scale, you can narrow down your crosshairs and only target the customers who have a chance of turning it into a lead. The concept of segmentation can also help you understand the strengths and weaknesses of your competitors.
The data insights will help you identify that your usual suspects are not the only ones who are targeting the same customers as you are.
From the data, you can break down your customers into different meaningful segments based on age, gender, interests, occupation, and customer spending, etc.
Moreover, you can segment your customers for custom marketing campaigns, and it will allow you to bring in more ROIs.
You Can Create Custom Products for People
There are many organizations out there who have their hands on the general public’s data on a very large scale. They normally collect this data informs where people don’t necessarily think about their data being sold in the future. But, these organizations use these large chunks of raw data and sell them to advertising agencies and marketing companies for large amounts.
The marketing companies buy this data because it is very smartly categorized and segmented to fixed audiences.
What does this mean for the marketing industry?
Well, many companies nowadays are using this data for purposes of email marketing and SMS marketing. Since your potential leads are most likely to see your SMS in the morning, many marketing agencies have their focus on the public’s phone numbers, and the more segmented it is, the better results it yields.
As a marketer, you can leverage the raw data obtained from different sources and use it to understand the interests and tastes of individuals. You can then hit them up with specialized products and ask them if they are interested in it.
For example, you get your data from a local attire store where they had somebody write their name, email address, and phone number in exchange for an interview after the customer bought a denim jacket from them.
Now, let’s imagine a local artist who is good at making aesthetic drawings on denim jackets, buys this data from that local store. The artist can then hit up the individuals who bought denim jackets and ask them if they would be interested in custom denim designs for their coat. Sounds smart, right?
You Get Customer Loyalty
When you communicate with your audience in personalized marketing campaigns, you are indirectly building a trust relationship with them.
Especially when you are hitting them up on the basis of their interest, and when you are hitting them up with the right message, at the right time, that is when you get customer loyalty. You give them value; you give them authentic products and services, and in return, you will have customer loyalty and permanent conversions, and that is the art of data mining.
Customer On-Page Time Analysis
You should be using CRM tools to observe what a customer is doing on your website. This point is especially suitable for companies that have online businesses. You should be observing what people are doing on your website, where are they swerving to, and when are they losing their interest.
The customer’s journey analysis on your website will yield results that will help you make decisions that will improve your digital platform’s layout. Your website’s layout should focus on generating maximum sales, and that is why a customer’s on-page time analysis is vital.
Timely Merchandise Planning
When you start mining your database, it will help you identify which items in your inventory are essential to customers. So it will not only help you update your inventory but also give you an edge about understanding customer behavior patterns when it comes to buying.
By looking at the current layout of the store and observing the statistical figures, a company can evaluate the requirements of items for the next month, and also for another similar venture.
You Can Forecast Your Sales
At this point, we will look at your previous experiences about what customers have bought from your store and what are they going to buy again. Basically, you can observe your historical data and inventory and deduct your prospect sales for the next day, next week, next month, and even the next year. There is always a difference in the estimated value and actual value, but the whole process helps you breeze through the process in an organized way.
Another approach that you may use while forecasting your sales based on your data is to predict your sales in three categories, a realistic approach, an optimistic approach, and a pessimistic approach. This will help you prepare and be ready for all kinds of situations.
Better Planning and More Sales
Of course, when you have your hands on the most important statistical figures about your customer, market, old sales, and future predictions, you can move forward with better planning.
As a result, you will be attracting more customers, and more customers mean more sales. Data mining leads to better business planning and helps companies score more profit.
You Can Do Basket Analysis
The basket in the basket analysis refers to what customers use when they are shopping. So basically, it is a more general term that refers to the complete analysis of overall data.
For example, if there is a telephone company, it should look at its complete phone records and determine how many calls are outgoing, how long are the calls, missed calls, etc.