Digging Up Dollars
This article shows that information about customers can benefit companies in several ways.
- First, it helps companies gain customers. This is accomplished by sorting through a database of customers and their attributes or characteristics. Selected potential customers with certain attributes then became the company's target market.
- Second, the use of data mining software can reduce expenses. Some data mining applications can detect people who are likely to commit a fraud. Companies can incur a lot of expenses detecting a fraud, and these applications can reduce fraud, which in turn reduces expenses.
- Third, it can make a company more profitable. Data mining software can be used to figure out which promotions will be the most helpful based on customer information. For example, telemarketing may be less effective than advertising on Google if customers are likely to screen their calls.
Many people think that all of their purchases on the internet are protected, and in return they feel safe putting their account information on an order form. This information may be protected, but companies have to know what patterns consumers engage in to help their advertising. Before reading this article, I didn't know exactly why companies use data mining, and the fact that it helps them follow people who are likely to commit fraud is really interesting. How would a company be able to narrow down which consumer is likely to commit a fraudulent purchase?
ReplyDeleteMany people also do think that there information they type on the internet is protected as well. I think its strange for major corporation to track and file there employees and customer through data mining techniques. If company can track your buying bahivior what else do they know about you? I think the way data minning techniques are being used play a thin line between privacy and marketing.
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ReplyDeleteI think Google is a great example of a company that uses data mining to keep track of their users' online habits and incorporate that data with much of their other online services as well as target advertising. Recently, Google created the all-inclusive, one privacy policy across their services in order to better collect and use consumer usage data. This saves them from having to data mine through different services across their platform to collect user information. I really did not have a problem with that move, but what do you guys think?
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