Data mining – the process of searching big chunks of data to uncover useful patterns and trends – is not just for big businesses any more. Small businesses can also use the technique to have a better understanding of customers and the changing business trends, identify potential business fraud, and gain great business insights.
According to an article published in the Financial Post, data mining is acting as a new weapon for small businesses. It can serve diverse sectors in diverse ways.
- In Banks – to identify customers who are expected to default on loans and tax authorities, to identify tax returns that have chances to get falsified, and to manage the risk factor in transactions among other uses.
- In Police Departments – in crime analysis, in crime prevention, threat assessment, to identify where crimes are likely to occur.
- In Healthcare – to detect fraud and abuse, in managing good relationship with customers, to identify effective treatments and best practices, and to understand the healthcare expenditure of patients.
Every business transaction reveals some sort of critical information that may prove useful for decision making. Efficient data capture or entering of captured data alone may not be sufficient. Data should be subjected to data processing and extraction and evaluated in entirely new ways to extract insightful information. An article published recently in the National Federation of Independent Business states that small businesses should consider 6 things before getting into data mining.
- Identify the questions that you want answers for regarding your customers’ behavior
- Do an audit of your current data situation
- Evaluate your skills internally-do you need to hire a consultant?
- Do a quick data analytics pilot
- Measure efficiency over time (operations and marketing)
- Identify patterns and trends. Make recommendations based on these.
Mining massive volume of data into meaningful information and executing data into resourceful business intelligence is a tedious task. Strengthening small businesses with business intelligence can be done by identifying the right data for data analytics. Data identification can be done through a step by step method — filtering significant data needed for your business, by identifying metrics that point to target customers, using analytics tools to monitor and evaluate internet marketing campaigns, and finally the meaningful interpretation of big data.
In today’s world, every business, regardless of its size, is looking to gain customer intelligence. This will help especially small businesses to have a more efficient data mining process in evaluating customer behavior and business performance. It will enable businesses to gather objective data from internal as well as external sources and drive business marketing growth.