In any competitive market, companies are constantly trying to get ahead of the competition with sure ways to increase profit. Data mining is a process that helps companies advance in markets with little risk.
Data mining helps people outpace the competition, attract consumers and move consumers to make supplemental purchases. Since data mining is a real-time system, companies are able to see trends as they happen rather than finding out at the end of the quarter that products were mismatched to the needs of the market. “We have literally seen companies put their competitors out of business with the proper use of data mining,” says Larry Kucera, senior sales consultant for Premier Technologies.
Smart Business spoke with Kucera about data mining and how it can help a company pull ahead of competitors in the market if properly used.
How do companies use the data mining process?
Data mining is a broad set of technologies and applications used to extract market information, to analyze the data and use the aggregate to make timely business decisions. Data mining looks at the buying behaviors of an industry as well as determines consumer trends and advertising approaches. This analysis shows what items consumers are attracted to and how quickly their desires change.
Data mining is used in all markets and throughout the entire year, but during holiday seasons this process can make or break a company. On Black Friday, a store using data mining will be able to see what product is sold the most in real time. This means it can predict hot items and have those items available in its stores before competitors. Other forecasting processes only give market numbers at the end of the month or quarter, so they lose out to the competitor who uses the real-time system.
How do companies implement data mining?
Companies run numerous applications to collect enormous amounts of information on their market, products and consumers. To use this information properly, all the information collected from all locations needs to be gathered in one central database warehouse and then used to help forecast the company’s future. This helps meet the demands of the market, outpace competitors, and go to market quicker with new product capabilities and offerings.
To implement data mining, an assessment is completed of the company and the current market. It is necessary to determine the platforms and technologies currently in use and the purpose they serve. Then an ETL tool is used to extract, translate and load the data that is analyzed on a day-by-day basis. Finally, a permanent tool is put in place that best fits the company to monitor the business in real time. Many companies do not have the knowledge and resources to put these technologies and applications into their companies to see the end result. Companies with experts in the analysis of this data should be utilized to get the best possible outcome.
Why is this process better or easier than other research methods?
Data mining uses your company’s data and your value to market. Typical market research data looks at all competitors in the market; this data is more accurate because it reflects why people make purchases from a behavioral standpoint and it allows business owners to extract trends specific to their market.
All of the data is time-sensitive. This process is much more effective than other options but some companies simply don’t know how to use the data collected.
Some companies use spreadsheet analysis; while that can show you similar trends, it is not in real time so by the time data is assembled and trends are determined their competitors using mining data have jumped ahead in the market and are stealing consumers.
How can companies maximize such a system?
A company should determine how it wants data mining to work with its strategic plan. If the strategic plan is to expand the company to new markets and locations, it needs to learn how to use the data collected for that purpose. Other companies may want to introduce new products or services.
A company should determine where it has been, where it is today, and where it wants to go in the future; it is necessary to determine the steps to reach that ultimate goal.
Data mining can also help determine advertising methods to reach target audiences.
How can investing in these programs help companies expand?
Data mining is predictive. Why roll the dice when this process can determine the path that will lead you to the best result? Some companies waste money with advertising for possible consumers as they try to push their way in to markets; this is expensive and there is no guarantee there will be any additional profit from the investment. Data mining is used to anticipate the market and grow a company according to trends.
LARRY KUCERA is a senior sales consultant and domain expert in business continuity planning for Premier Technologies. Reach him at (412) 788-8080 or email@example.com.