Data mining refers to the collection, processing, and analysis of random data, and finding patterns in it to predict and discover many insights beneficial to a business. Every way in which a customer interacts with a business is a gold mine of inferences and inputs that can help in finding if the product/service is satisfactory. If not, what steps should be taken to improve? Not only this, but the insights can also help predict market behaviour; which is something to keep in mind before launching a new product. The advantages of the above, be it social media data mining, MS Excel Data Mining, or SQL Data Mining- are numerous and span across every field in business.
Various Data Mining Techniques Include:
1. Regression: collecting and analyzing data to predict the future behaviour of customers, so that you see every hurdle coming from a mile away; and are prepared for it.
2. Clustering: Classifying and merging the data of different categories to notice trends that were not visible before, so that you know what is working and what isn’t.
3. Anomaly Detection: This technique is one of the most important benefits of data mining. If any irregularity or abnormality stands out, you will be the first one to know. This helps in minimizing efficiencies and to quickly point out if you are taking the wrong decision.
Some examples of industries that are making incredible use of Data Mining are:
- Marketing: Social Media Data Mining helps advertisers and marketers build prediction models to judge how people will respond to their new marketing campaign or products. Also, it helps in estimating the size of a responsive customer base while also helping to target them for maximum profits and minimum customer acquisition cost.
- Finance: MS Excel Data Mining or SQL Data Mining for bank records and credit scores help banks estimate if a loan is good or bad by creating a risk estimating the model. It also helps in predicting stock behaviour, which is indispensable when it comes to stock trading and/or long term investment. In addition to this, data mining also helps banks detect fraudulent credit card transactions to protect the owner of the card. Overall, in the finance sector, data mining has become an integral part of every area and has led to unprecedented change over the years.
- Manufacturing: SQL or MS Excel Data mining in the field of manufacturing has helped to keep various control parameters in check. Be it product specifications, or manufacturing efficiency or even detection of faulty products, data mining acts as an essential tool. Besides, it also helps in product design, using data discovery to maximize usability and safety.
- Retail: Through analysis of markets and customer behaviour, retail stores can optimize their supply chains and delivery schedules for efficiency. This not only saves time but also saves a whole lot of money and helps in maximizing profits. Also, various superstore chains like Walmart, IKEA, etc even pan out their architecture and interior to direct customers towards the areas with the most profitable products. Even the way products are arranged on shelves is tweaked and altered to help increase customer visibility and to influence their choices.
In this day and age, data is freely available and appears random to the inexperienced businessman. But people with an eye for detail, and an affinity for the future are usually the early adopters who later flourish in this field. With the help of algorithms, you can also utilize data to your advantage at an unforeseen scale.