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March 21, 2013

How Businesses Can Benefit from Data Mining

Data mining is just what it sounds like--mining for data from any number of databases or other sources to extract key information. Ultimately, data mining should be the end result for every business with a database management system. However, people get caught up in the maintenance and management aspect of data and tend to overlook the mining that's possible. That can cause business owners to miss out on huge opportunities.

Every business owner with a database should ask themselves, "Why do I have this?" What's the point in collecting data if it won't be put to use? Whether it's a not-for-profit collecting demographic information that can be used for grant proposals or a foundation that collects information from past donors, a lot of good can come from data mining. Here are the top ways businesses can benefit.

More Money

Money is always a good thing in business. When data is mined that unearths the kinds of projects past donors contributed to, types of products customers have purchased in the past, or a not-for-profit can put a number on statistics for a grant proposal, it can result in serious cash. Once a business knows who the top donors are or what their customers want, they can customize approaches and outreach.

Improve Branding and Marketing

Data can reveal a number of things--like what direction the marketing department should take. For example, there might have been a recent customer survey asking about what services or products consumers want to see. That kind of information is gold, and a marketing department can do wonders with it. If a survey or any feedback is being collected, put it to use.

Streamline Outreach

Whether a business depends on e-mail blasts, print ads or social media, knowing how customers want to be approached is important. Data that includes relevant e-mail addresses, mailing addresses or social media pages can help streamline any mailers or outreach. It also saves money, whether it's in postage or time, by keeping consumer information updated.

Tap into New Markets

There are some databases available that businesses can purchase, or the databases might be available to the public free of charge. Business owners can use the databases of others to find out more information about potential consumers and identify any holes in the current tactics. However, when handling outside databases, it's especially important to practice caution. Privacy is a big legal issue, and sometimes it's easy to overstep boundaries.

Share and Share Alike

Sharing information is largely illegal, but it all depends on what the customer has signed. For example, some coalitions may share information on consumers in order to provide better services. This can be dangerous grounds, but if it's legally acceptable, some business owners can access the data of other partner organizations, too. This largely expands the availability of information and can provide more data--and likely in turn more accurate data--to improve the bottom line, services and research.

Learn from the Past

Data mining past information and comparing it to the current situation can reveal a lot. Graphs can easily show any troubling sales years, spikes or other trends that should be taken into consideration. Seeing the ebb and flow of a business via data can provide insight that otherwise might be overlooked. For example, a business that knows there's a history of high sales in July can work on maximizing that month, while giving extra attention to periods where sales slack.

To play it safe, business intelligence services might be in order no matter the business. Experts can help businesses determine what's legal and appropriate, as well as provide structure and security. If data mining is new to a business, it can be difficult to figure out where to start. Just figuring out how to weed out the right information can be time consuming--however, with a little research and maybe the help of some experts, it can open up a world of possibilities.

Edited by Brooke Neuman
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