Data Mining Demo for Marketing vertical: How to create a Targeted mailing list?

Standard

Tools I’ll be using for the Demo:

Excel 2010

SQL Server 2012 (specifically SQL Server Analysis Services)

Excel Add-in for Excel.

Sample data-set that comes with the excel add-in

Scenario:

Marketing Department needs to create Targeted Mailing list.

What data do we need?

To create a Targeted mailing list – we’ll need a historical data-set of customer purchase history

What will we do with the data?

Based on the historical data-set, we’ll be able to find “patterns” in the past consumer behavior. E.g. A single male going to college living in Europe is likely to buy a bike. And the using these patterns – we would then classify NEW customers.

Technically, we’ll be using the classification method using the Microsoft’s decision Tree algorithm

(Read the difference between classification and clustering)

Let’s get in action!

STEP 1: Build a Model

Data Mining Tab > click on classify:

data mining in excel example customer classification for maketing maling list 0

Follow the steps:

data mining in excel example customer classification for maketing maling list 1

Select the data:

data mining in excel example customer classification for maketing maling list 2

In this case, since we want to predict the likelihood of buying a bike – our column to analyze is BikeBuyer

 

data mining in excel example customer classification for maketing maling list 0 3

For the Demo, I am going to just leave it default. There are “optimization” steps that you can do but for the demo I am going to keep it super simple

data mining in excel example customer classification for maketing maling list 4

Name the model:

data mining in excel example customer classification for maketing maling list 5

The Model has been created!

data mining in excel example customer classification for maketing maling list 6

STEP 2: Query the MODEL to predict the likelihood of bike purchase of a new customer

data mining in excel example customer classification for maketing maling list 7

Select the model:

data mining in excel example customer classification for maketing maling list 8

Select the data:

data mining in excel example customer classification for maketing maling list 9

Specify the columns that would be used in predicting the likelihood:

data mining in excel example customer classification for maketing maling list 10

Add the column that will have the “predicted value”

 

data mining in excel example customer classification for maketing maling list 11

And example of Data Mining Expressions (DMX):

data mining in excel example customer classification for maketing maling list 12

For the demo, I am just going to add the column to the existing table:

data mining in excel example customer classification for maketing maling list 13

Yay! Here’s our Targeted Mailing list – see the last column:

Screenshot 1

data mining in excel example customer classification for maketing maling list 14

Screenshot 2:

data mining in excel example customer classification for maketing maling list 15

Now what?

Marketers can now send “coupons” to ONLY those people who are most likely to buy a bike! And so that’s how you create a targeted mailing list using the Excel Data Mining add-in.

What do you think? Leave a comment below.