Collecting data is crucial for understanding your customers and developing new strategies, right? That's why data mining has been increasingly used to help companies with this important task.
During the stages taken by the consumer , there is a variety of information that he provides and that is often not used by companies .
Analyzing as much data as possible can be helpful in improving the customer experience and ensuring good results for your business.
Are you familiar with data mining and how it can help you? Check out our article and learn more about it now!
What is data mining ?
Data mining is the 'mining of data, that is, it is a process that consists of working with the data generated in the interaction of users with the company and transforming it into relevant information for decision-making .
This process brings together techniques and technologies that automate the reading of information, grouping collected data, analyzing patterns and, in this way, helping to predict specific events.
This knowledge can be used to improve the consumer experience and relationship with the company, identify errors in processes and guide decision-making .
Data mining is important because it is based on real data, not just assumptions about what happens in the interaction between your company and the customer.
It works hand-in-hand with Big Data , which monitors consumers' movements through their visits, interests, searches, and various other actions. Data mining then converts this data into useful knowledge for managers.
Data mining tools analyze data , uncover problems and opportunities , and provide business behavior diagnostics.
The systematic nature of this process encompasses several steps. They are:
- Data exploration;
- Model building;
- Definition of standards;
- Validation;
- Verification.
In these stages, Information Technology, Artificial Intelligence and statistics are used.
Data mining techniques
Data mining is a broad field that can utilize a variety of techniques to uncover the necessary information.
To help you better understand this technology, check out some techniques below!
Neural networks
The concept of neural networks is based on the functioning of the central nervous system, formed by a complex set of neurons that communicate and process data quickly.
Its technological operation takes place through networks that imitate the data processing system.
Just as human decisions are based on experience, the neural network stores information through repetition and learning .
Decision tree
data mining technique consists of a flowchart, in the form of an inverted tree, that explores decision possibilities.
The tree begins with a node—the root—and unfolds into probable outcomes—branches—and hypotheses—leaves. In this way, through the flow, solutions are tested.
Rule induction
data mining technique . It involves analyzing the relationships between items in sets to find trends and behavioral patterns.
This model is widely used in retail through identification on items purchased together. For example, when someone buys shoe x, they also acquire sock y.
Therefore, these rules are used for campaigns and to leverage the second sale.
What are the benefits of using data mining ?
Using data mining can generate several benefits for companies, with the ability to understand your customers and personalize your actions being among the most cited . But it's not just for that!
Check out some reasons to adopt this process.
Identifies patterns of behavior
Your consumers’ habits and behaviors can signal risks and identify sales opportunities .
By analyzing data, it's possible to understand what groups are buying, what is being sold together, and the best times to purchase certain services, for example.
Knowing patterns provides input for thinking about marketing , design , promotions, product positioning and strategies to stimulate sales and attract customers.
Helps in decision making
With so much knowledge generated by mining, it is possible to make more precise and assertive plans within the business .
Furthermore, information will come from different sectors, making it possible to deliberate on many departments and indicators, such as price, quality, inventory, communication, among others.
Reduces risks
Thinking strategically also means thinking about finances and cash gains and losses.
By making the wrong investments and not knowing the company's focus, money is lost unnecessarily.
This way, by having data and taking more effective actions, the risks of wrong investments are reduced and returns can be increased .
How to use data mining ?
Database analysis is the most basic use of this technology, which can be integrated with any information database that the company already uses, such as CRM .
By grouping information, managers can better understand their audience, categorizing them as they see fit.
To begin the process, it's important to identify your data sources, whether from physical or digital stores. You need to map where the information your customers provide enters.
With this identification, data sources begin to feed and make correlations, seeking patterns through instructions that can be predefined by managers.
With the data in hand, it's time to think about strategies that can be useful for your industry, bringing customers closer and generating financial returns .
Conclusion
Collecting customer data is very important, but you need to know what to do with it and direct the information so that it is profitable for the business .
By using data mining , you can personalize actions and maintain an even greater focus on the quality of the customer experience . By bringing your audience closer to your brand, you're more likely to build fanbases and gain spontaneous influencers for your image .
What strategies have you already implemented in your company based on collected data? Now that you know a little more about data mining and how it can help you, learn more about customer satisfaction surveys !
