Data Mining

Data mining, predictive modeling, artificial intelligence, and neural networks are all terms that describe the same process, though the industry jargon has evolved a great deal over the last 40 years. But what is data mining? What does it do? And exactly how can it help your organization?

As an online retailer, you're hoping to grab a bigger piece of the market this year. Statistics predicted e-tail spending would grow to $83.5 billion in 2005, and even higher figures in the following years. What tactics will you employ in order to stake your claim on new customers and high-dollar transactions? Before you spend more money on blanket marketing and advertising techniques, why not determine who is most likely to buy your products?

Data Mining at Work

Data mining takes existing data, identifies seemingly unrelated patterns and relationships and uses this information to predict future behavior. These predictions will have a direct impact on spending, revenue, customer retention and other essential operational components. Let's look at a specific example of how data mining can enhance a particular campaign.

A Pennsylvania-based financial institution hoped to expand its customer base through a direct-mail loan check. Their internal database logs more than 300 customer characteristics such as number of open credit lines, card balances and whether or not that customer has ever taken advantage of a loan check offer through the mail. Data mining allowed this financial institution to establish common characteristics within its own internal database. This information was then used to establish a predictive model--in other words, the company determined that its best chance at increasing its customer base was to market to an elite group of people, such as married couples between the ages of 35-40 who make under $65,000 a year, owe more than $15,000 in credit card debt, have at least four open lines of credit, have responded to a loan check offer in the past, and so forth. This model is then applied to a new direct mail campaign with the hope of increasing annual revenue.

While the volume of organizational information available to a company has increased exponentially since the dawn of the Internet, the need for data mining is not a new phenomenon. However, technology has simplified the process and helped some companies assign a tangible value to the practice of data mining (at least those who make the effort to understand and implement the process). But software alone will not solve the problem, as many have unfortunately discovered. Rushing to find a data mining solution can be a costly mistake. Instead, take the time, make the investment and dig deeply into predictive analysis and its best uses to reap the biggest gains.

Public Training Courses in Data Mining

The Modeling Agency offers a three-step course in data mining. The classes are equally educational and beneficial when taken independently or as a progressive series. By signing up today, you'll be one step closer to understanding the concept and potential of data mining. To register, simply call (888) 742-2454.

Since January of 2000, The Modeling Agency has helped companies like Boeing, Blue Cross Blue Shield, Oracle, Glaxo-Smith Kline and Verizon decipher existing data and translate that information into profit. Led by President and 14-year data mining veteran Eric A. King, The Modeling Agency is comprised of 18 seasoned consultants who believe service is the foundation of every data mining project.