"What's in a name? That which we call a rose
By any other name would smell as sweet."
Romeo and Juliet (II, ii, 1-2)
Nowadays, it seems people use a variety of terms - "data mining", "predictive analytics", "descriptive analytics", "advanced analytics", etc. – to describe a common goal: enable data-driven business decisions.
With the right data, front-line employees can make better decisions on a day-to-day basis. These decisions will consist of a clear action that is supported by a solid rationale. For example:
- I offer this product to this customer because it's very likely that he will buy it.
- I call this customer because it is likely that she will leave us soon
- I send this promotion to this group of customers because it is likely they will respond favorably
- I increase our inventory for this item now because we will likely see increased demand next week
Without data-driven business decisions, you can end up with situations like this:
Data mining helps you avoid “Dilbert” decision making in two ways.
First, the decision’s rationale
is based on actual data - not gut feel. A data mining model can incorporate insights into what customers typically buy together, how customers behave before they stop being customers (churn), or how seasons, promotions, or other factors affect sales. Typically, employees only know small parts of the “big picture”. Through data mining, the model makes the insight of all employees accessible for analysis.
Second, the decision action can be automated
. This is perhaps the most powerful aspect of data mining. When a customer contacts your business, your front- line employees don't have the time to analyze what products tend to be bought together (market basket analysis model) or identify customers who behave similarly (customer segmentation model). Your employees need concrete recommendations. This can be achieved by regularly applying a data mining model on new data. The result of this model can yield instant recommendations that can be made visible inside every customer’s profile.
Sounds great, doesn’t it? So what is holding you back?
Not only does InfoSphere Warehouse provide a comprehensive set of data mining capabilities
, but it helps you build and apply data mining models for a common business problems. In the coming weeks, we’re dig deeper into these capabilities. But if can’t wait, here are some resources that will get you started.
IBM Advanced Analytics