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:

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Follow the steps:

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Select the data:

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

 

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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

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Name the model:

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The Model has been created!

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

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Select the model:

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Select the data:

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

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Add the column that will have the “predicted value”

 

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And example of Data Mining Expressions (DMX):

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

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

Screenshot 1

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Screenshot 2:

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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.

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