How Data Mining Helps You to Understand Your Customers Better
First, we need to know what data mining is. Data mining is a simple process of discovering patterns of anything in massive data storage. Now, this can be used in the e-commerce industry to help predict what your potential buyer would like to see and buy in the future – all according to what they have seen and purchased in the past. Data mining in marketing plays a vital role in shaping a business.
Let’s put it like this. You’ve no doubt looked out for something on a website like Amazon, Gearbest, or Aliexpress. For this demonstration, let’s say you were searching for baby clothes. Haven’t you found it funny that the next time you visit the website, all they do is market baby stuff to you? These are the effects of data mining on the spot!
Data mining has many applications in all realms of business, either real-life or internet-based. It helps you predict, grow and nurture the relationship with your customer or customer to be. In turn, this rakes in a lot more business and money.
To provide the best results when it comes to managing customer relationships through data mining, we need to understand the best CRM and Data Mining models. Although this is a relatively new technology and method of developing customer relationships, all spheres of businesses have invested in it. It just shows great promise.
Data mining in marketing is used for predictive purposes, as you can probably tell by now. You can see how numerous business spheres can benefit from it. The effects and the sheer detail of customer analysis through their data is unmatched by any other technology. If your business cannot do data mining, outsourcing this to experienced people like Data Entry Outsourced Professionals is a great idea.
There are innumerable benefits of using this technology when it comes down to business, but there are a select few when it comes to managing customer relationships.
Basket Analysis refers to the “baskets” of e-commerce websites. Like our example above, you’ve added some baby clothes to your basket before you bought it. You might have changed your mind and removed it at a later date or before the purchase itself. You might have forgotten about it, but the website hasn’t.
Since the website has remembered what you’ve placed in its basket, it will be sure to recommend other alternatives to you. Is that baby jumper to die for, but the price is a little bit too steep? The website will suggest you cheaper options to the thing you’ve thought about, in turn, raking in more sales.
Basket Analysis is also used for scanning and mining information on credit cards. Don’t worry – you’re not getting robbed through this method. This method is used to determine if the person purchasing any item is a fraudster. It can also determine how much the customer is willing to spend on a select product and even collect a debt if they owe any.
All in all, Basket Analysis is used to collect and accumulate as many buyer patterns as possible, to further improve the relationship with the customers, and to forecast future sales.
Sales forecasting is the next step and the logical successor to basket analysis. This determines the products you’ve bought with your hard-earned dough. After you’ve purchased a product, you’re sure to be recommended and bombarded with either similar products you might enjoy or complementary products.
Let’s put it like this. You’ve bought a 6-piece dinner set for your next dinner party, wouldn’t you like a fantastic deal for a great chandelier to go along with it? This is sales forecasting at work, and at it’s finest.
This approach helps you determine how well your product will sell in your local area or on the internet. It provides you with important questions you must ask yourself before even starting a new business or including a new product.
You can’t sell energy drinks if you run a small shop in a retirement community, can you? Analyze your customer base, your potential customer base, your competition, add all these factors to best forecast your future sales.
Consumer Databases on Social Media
Social media has been an integral part of our lives for a long time now. Most of us leave a bigger internet footprint on them than we might realize. People are oblivious to how much information they leave behind on Facebook or Instagram – you need to exploit this.
Gather as much information as you can on your potential local customers. Data Mining on these websites can help you accumulate a lot of consumer information, leading to better forecasting, and in turn, raking in a lot of money.
By observing your customer base and their consumerist habits, you’re sure to have a lot of information on what they might be willing to buy.
With this method, you can create new products that fit the gap and that sell themselves. Selling a product is just as important as making the product itself.
By collecting data on previous purchases, you can determine where and what that gap is. Say your delivery service, and customers react more pleasantly if every sixth delivery is free. The thing they don’t know is that you’re making more money than ever on their brand loyalty.
Offer discounts on specific products and items. Timing is everything, so be sure to plan out when the time is right to do any of these activities. If you time everything right, you’re sure to prosper.
Stale products can be an absolute business killer. Having too much merchandise is a cost-effective way to commit financial suicide. Never overstock and never understock! Now, how would you know how much merchandise is too much merchandise?
Simple! Data mining your local area, if you’re an offline business, is a sure way to determine how much merchandise you will need for your local store.
If you’re an online business, you can determine how much stock you will need. You do this by looking at your customer base, potential customer base, marketing reach, and other factors. If you keep your merch fresh and price-efficient, you’re sure to sell out in no time.
Sometimes selling out all of your products is not a bad thing. You can create a higher demand for the product, which will create hype for when you eventually bring it back to the shelves. Effective data mining can also help you price your product based on demand and competition.
All in all, data mining is one of the most effective ways to improve your CRM and optimize your business. Business optimization is the best way to enhance sales overall and take your business to the next level. Remember, a happy customer is a returning customer!