Defusing buzzwords — data mining

gold and silver bitcoinsJust a few weeks ago, I only knew the term data mining from my previous research into Bitcoins ( = complicated stuff!!)

Imaging my surprise when I found out that data mining is a lot closer to home:

Techniques used for discovering patterns in large data sets.

Clustering analysis

Segmentation or clustering is one of several data mining techniques.

If you run a clustering analysis on your customer information, the output will be a segmentation based on your customers natural occurring behaviour. Your criteria are not predefined but a result of the analysis. Interesting approach!

Traditional segmentation was typically based on predefined demographic variables.  But the amount of data available was a lot smaller only a decade ago, so the whole segmentation exercise was really different.

A simple example

Tableau has a built-in clustering analysis that I used for a recent Makeover Monday assignment (dataset from European Commission). Dashboard 2

The clustering analysis does not simply split the dataset in three equal parts, but finds common behaviour a basis for the grouping.

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