Lots of people think of data mining as some sort of creepy Orwellian nightmare, but really, what’s a little data?

It’s not scary, is it GLAD WORKS friends?

We’re not afraid!

Admittedly, the term “data mining” sounds kind of scary. It’s as if spies from Wal-Mart or Target are hiding in the bushes and looking in the windows at night. But that’s just silly! They really just break into our houses and go through our stuff while we’re at work. You did not leave you sock drawer open…it was THEM!

Kidding.

Just kidding.

What is data mining?

Data mining is really just a computer-assisted way of searching through and making sense of sets of data and pulling out meaningful information. This is data we all give away quite freely without realizing it. Every time we open an email, use our bankcards, or use a coupon, that information is warehoused and used to help reveal trends and patterns of behavior.

Data mining is what makes mathematicians and statisticians suddenly seem incredibly sexy these days.

They can interpret the computer-generated data sets and pull predictions about future trends and behaviors from it. The ultimate goal of data mining is to gather information about people so that businesses can make informed decisions about what their customers want and need. Ultimately, customers benefit from such practices in the form of special offers and useful products that make their lives better.

Nobody is looking in our windows at night and writing down what we’re doing so they can carry out some evil plan to take over our brains. They’re mostly just trying to send us a coupon we might actually use.

That said, people might still be looking in our windows, but it’s not for that reason. Maybe they don’t have cable…?

While it can totally creep you out when you get coupons in the mail that are a little too perfect for you, the truth is that without data mining, we’d all be pretty sad pandas. We wouldn’t get coupons in the mail for things we actually use and we probably wouldn’t have as many cool technological innovations that make our lives easier.

Life would be different.

Data mining and consumer habits

Once the data is assembled and all the necessary conclusions are drawn, the data is then put to use in an attempt not to change customer’s habits, but to work with them. Once a habit is ingrained, it’s really hard, if not impossible, to change it. Anyone who’s ever tried to ditch a bad habit knows this all too well. So, lots of times, data is used to find out what habits consumers have exactly and how to piggyback on them and work with them instead of trying to change them.

The only time when buying habits are open to influence and change is during a major life event like getting married, buying a house or having a baby. That time of flux is the sweet spot where marketers try to get in and influence some new shopping and buying habits.

Some of what data mining does is help identify a series of buying behaviors that indicate when a consumer’s habits are indeed open to change. For example, someone suddenly buying a lot of lamps and towels and rugs might be preparing to move into a new home. That’s a great time to get in there and offer the customer a coupon for say, new curtains, but on the way to the curtains department they’ll realized they can get all kinds of other stuff too. Therein lies the hope that once the customer sees what great stuff they can get, they’ll get into the habit of coming back.

There was a fascinating article about this in The New York Times recently if you’d like to know more about the science behind our habits and how Target can tell if you’re pregnant. No kidding. They know.

Almost every major retailer has a department dedicated specifically to “predictive analytics.”  This department studies and tries to understand our shopping habits as well as our personal habits so they can effectively market to us. While they’d probably love to really get inside our heads to know exactly what we’re thinking, they can only rely on data sets and algorithms to help them understand how to serve us better.

Some consumers feel that data mining is an invasion of privacy, but as a business owner, if it means that you can serve your customers better, would you consider dedicating some of your resources to predictive analytics?