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Knowledge discovery is not industry biased, though it is more prominent in mid- to large-size companies. The reason for this is based predominantly on the volume of incoming data--the larger the company, the more information. With the help of computers, the Internet and technological innovations, companies now have the ability to capture gargantuan amounts of information. We've been storing this data for decades--customer profiles, demographics, buying habits and thousands of other tidbits of information that independently don't provide any value at all.
However, by connecting, overlapping, comparing and analyzing this same information, you can uncover benefits and purpose. That is knowledge discovery--taking what you have, making sense of it, and then putting that data to work for you. In order to simplify the process of knowledge discovery, also known as data mining, let's look at the fictitious, information-rich company known as Local Grocer that has decided to implement the practice of predictive modeling. A Successful Knowledge Discovery Story
A grocery store captures countless pieces of information through in-store savings cards. Every item purchased is logged, customer latency (or time between visits) is noted, as well as what coupons are redeemed. Local Grocer noted that when men came in to the store on Wednesday and Friday evenings, they often bought frozen pizza. The men who came in Fridays for the pizza also purchased a six-pack of beer, whereas the Wednesday shoppers did not. How can this knowledge discovery help Local Grocer increase revenue?
By identifying trends and applying this newfound information, Local Grocer can maximize profit by charging full price for both the pizza and beer on Fridays. Moreover, Local Grocer can use in-store pizza displays near the beer section, and vice versa. Knowledge discovery worked well in this instance, though the process is equally as effective in industries such as telecommunications, hospitality and retail. Come hear more success stories about organizations who capitalized on knowledge discovery. Join The Modeling Agency for an educational series on data mining that focuses on the strategy, methods, and practice of predictive analytics. Call today at (888) 742-2454 to reserve your spot. Space is limited.
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