Data Mining is Great for Companies Trying to Gain Traction for New Products

Cross-sell should work particularly well for a company that has one best-of-breed product and a bevy of products on the come-up with which it really wants to gain traction. The reason for this: more accurate prediction of which groups of customers will buy a second product and when. You may even be able to determine which product is the likely second choice of those customers, meaning that you know which of your immature products to pitch them. By leveraging data mining, your best-of-breed products can really slingshot your other products to stardom.

If you have a best-of-breed product, then it’s likely that the majority of your customers were introduced to your company via this product. They became your customers because of this product, are likely customers who seek best-of-breed products, and are unlikely to buy one of your offerings which is not best-of-breed. In fact, they might not even think of you when they think of a product category in which you have a lesser offering. When these best-of-breed customers go looking for a new product category (in which you do have an offering, albeit an inferior one), you won’t be top-of-list. This is where timing is key to you. Knowing when your customers will buy a second product is a proxy for when they have money to buy and a proxy for when they’ve turned their attention to another product category. Thanks to data mining techniques such as neural networks and decision trees, you know when they have money before your best-of-breed competitors, which means you have a headstart - an early opportunity - to suggest a product category that may just be entering your customers’consideration set.

Once you get this timing down, you can figure out the best way to tout the integration or synergies that make your product better. Heck, you might even offer a discount on your non-best-of-breed product. But it’s the timing that gets you there. And never forget that these are your customers and you understand them - their behavior - better than your best-of-breed competitors. Use it to your advantage by investing in some state-of-the art database analytics techniques.

Tags: crosssell, Data Mining

Add Personalized Product Recommendations to Your eCommerce Site

Istobe is a powerful recommendation engine that makes it easy to add recommendations to your eCommerce site. How powerful? Shoppers who click on Istobe recommendations spend 20-50% more than the average visitor.

This entry was posted on Monday, July 7th, 2008 at 7:55 pm and is filed under Data Mining. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.