How it works: Data Mining
Data mining is a process that allows computers to look for patterns in information.
It helps companies make sense of data they collect about customers to offer personalised service, anticipate consumer behaviour, uncover trends, and spot the unexpected. Here's how it works.
- Information Capture
A customer fills out a survey while surfing your Web site, which specialises in flowers and gifts. The survey information--including spouse's birthday and computer's IP address--is stored inside an Oracle database along with data from other respondents. - Data Routing
The administrator of the database, a real person, reviews the data and tags information to be sent to a data-analysis program like that from SAS. - Data Analysis
Once there, the program looks for patterns and statistical information. It discovers that 10 percent of its customers' spouses have birthdays in the current month. It also sees that for three years in a row, a particular customer has bought flowers during the week of his wife's birthday. - Rules Creation
That data then goes to a customer relationship management (CRM) package, such as E.piphany, which creates rules from those patterns, such as, "If people normally buy flowers in June, then send them a coupon in May." - Rules Application
A marketing analyst (a real person) puts the rules in a content management platform like Vignette StoryServer. The system creates a 10 percent discount offer for a floral arrangement and e-mails it to the customer. It also displays gift-related banner ads when the customer returns to the Web site. - Customer Notification
Since the customer has signed up for wireless alerts, his mobile phone receives a text page reminding him of his wife's birthday and suggesting several gifts he can buy.
