If you’re gathering data on your customers, you’re sitting on a potential gold mine of opportunity. By leveraging data mining, SMB business owners can leverage the power of data to gain insights that can help them grow their businesses and maximize their opportunity in the market.
Data mining involves taking large sets of data and using computers to analyze them for insights or patterns. The data can even be used to predict future trends. The technology has been around since the 1960s (when it was performed on tapes and disks). Still, it has continued to evolve in its sophistication and its accessibility to businesses of all sizes.
SMBs in every industry can benefit from leveraging data mining. For instance, a business team can look at data and perform analytics to try and anticipate and predict how a customer might act. This can allow them to adapt their strategies to increase their likelihood of becoming a paying customer, increase customer loyalty, increase profitability and reduce client churn.
These data mining applications are beneficial for marketing functions, with many possibilities to help benefit a business and help drive growth. Collecting this data is easier than ever before. Customers leave data trails across social media, credit card usage, email opens, geolocation, and more. This data can all be leveraged by an SMB to fine-tune their marketing efforts and enhance how they appeal their products to customers.
One form of data mining that can be helpful to SMBs is basket analysis, which connects the dots between what a customer bought in the past and used that data to improve what products are recommended online or how a store is laid out. A similar category of data mining, called sales forecasting, looks at past purchasing patterns to try and determine how soon a customer will buy again.
Another form of data mining is called database marketing. A business will leverage their data on customers and how they purchase to create products that they might want or run discounts or promotions. Data mining can also help determine how much or what type of merchandise to buy, or even how much to charge for it; a process often referred to as merchandise planning.
Data mining can also provide insight into market segmentation of customers, helping break customers into a targeted segment based on demographics or purchasing patterns. Marketing teams can then target more specific or relevant communications or campaigns at those customers for increased success.
These are just a few of the potential data mining applications available today to business owners and marketing teams. However, the reality is that these technologies are improving every day, and SMBs that stay ahead of the curve when it comes to data, face an endless potential to enhance their businesses through the power of data.