If you run an ecommerce store or connected to its money making even in the remotest way, then you know that your customers are your lifeblood. Now keeping your customers engaged and happy with your site are never-ending challenges. You’re perennially at risk from competitors, constantly changing product lines and of course, the highly fickle nature of customers who are ready to abandon your store at the drop of a hat (or cart in this case).
Meet Jim. Jim is looking to throw the ultimate birthday party for his 4 year old son and has quite a ‘to- do’ list for the party. Jim decides to kick off his party prep by logging on to his trusty ecommerce store and begins shopping, beginning with ingredients for the birthday cake. He spends a few minutes filling his cart with essentials like flour, eggs, milk, sugar, frosting and candles. Done with his purchase, Jim is on the verge of the checkout.
Association analysis – in the context of consumer product affinity, is also called Market Basket Analysis. It is an unsupervised algorithm – easier to comprehend if you understand the supervised model. Consider a case where the temperature and humidity in a particular location are given, you are trying to predict the quantity of rain on that day. The inputs are standardized and you observe / record the inputs i.e. temperature and humidity and of course, the rainfall.
The goal of classification is to build rules or models and represent them in a simple readable form using past decisions. There are multiple techniques that can accomplish this task of gleaning intelligence from existing data – Neural Networks, SVMs, Decision Trees and so on. We’ll focus on Decision Trees in this article since they sit well with the Marketing use cases like predicting conversion rates, buying decisions etc. Sounds obtuse? We’ll demystify this in a moment.
Clustering is the task of grouping a set of objects so that objects in the same group are more similar to each other than objects in another group. Well, now that the formal definition is through, we can get down to brass tacks – just replace the term objects in the definition with “customers “ and we’ll be on our way.
The Data Model per se, is a critical element in performance management not just for marketing platforms but any enterprise application that is data driven. No Surprise, that this is possibly the least focused on area on Marketing platforms. A detailed analysis of Marketing db structures is really out of scope here, but let it suffice to say that some MSPs have standard data models that they force fit for all marketers, some have a degree of flexibility while some are 100% customizable.