Customer Data Mining Essay

906 words - 4 pages

Every time you press that like button on Facebook or search a term on google or even watch a video on Netflix, you are subjecting yourself towards the ever growing industry of customer data mining, a $50 billion market, according to a 2012 Forbes estimate. Customer data mining has proven to be an extremely versatile tool for all businesses, to cut costs and increase revenue. We will explore what exactly customer data mining is, how it works, and lastly how businesses utilize this technology.
What is customer data mining? According to Merriam Websters Dictionary, customer data mining is the practice of searching through mass amounts of customer data to find patterns that can better increase ...view middle of the document...

For example, a restaurant chain could mine customer purchase data to determine when customers visit and what they typically order. This information could be used to figure out the most popular daily specials. Clusters are data items grouped according to logical relationships or consumer preferences. For example, data can be mined to identify consumer affinities, like a Flower Shop tracking their purchases to determine which flower is the most popular. Associations are datasets that can be mined to identify associations. For example, a home improvement store analyzing local buying patterns may discover that when men bought paint on Fridays and Saturdays, they also tended to buy gum. Using this association, the home improvement store owner can verify their paint and gum inventory accordingly. Sequential patterns are datasets that are mined to anticipate behavior patterns and trends. For example, an outdoor equipment retailer could predict the likelihood of a tent being purchased based on a consumer's purchase of sleeping bags and hiking shoes. Despite the complications of customer data mining softwares, many businesses use it to better their efficiency.
Countless businesses use customer data mining to help their companies overall success. According to April 3rd, 2012 article by Alexander Furnas from The Atlantic, Amazon utilizes customer data mining technology extensively. The whole recommendation system on Amazon’s website is based upon associations developed through customer interactions and purchases. For instance, Amazon’s customer data might reveal that customers who bought a Blu-Ray DVD player also tend to buy Blu-Ray movies and TV shows. Similarly, this form of customer data mining, although a more complex version, is behind Netflix movie recommendations. Google has also become an avid...

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