Stephen H Baum Leadership

BACKGROUND

From a CEO point of view, sometimes briefings on data mining seems complicated and remote to challenges at hand. That is why a tangible, simple example is worth a quick read. This blog post is sourced from:

NY POST STORY: BURTS BEES (LIP BALM); byline: lisa fickenscher

1. THE STORY

Clorox, parent (owner) of Burts Bees has a data mining unit who examined periods when sales seemed to spike. Probably using some root cause analysis of possible factors, they hypothesized that weather had a disproportionate impact on sales of what is a protective product. 

How might we find data that would inform us, they asked. This led them to the National Weather Service and its database: Wetbulb Global Temperature Index which tracks temperature, humidity, wind speed, sun angle and cloud cover. Matching sales data to weather data produced two interesting facts:

1. Weather and sales spikes are 80% correlated, not a sure thing but very important

2. Sales in any of the 84 weather zones spike when wind speed is higher than 7 miles per hour. 

That was part one of the data mining. Part two: use Nielsen data and Facebook data to target ads to people in the best zones and tag ads to individuals who are most likely to buy the product (the article did not explain how that part works). “We can follow that user to find out if she went to a store and may have purchased a lip balk product,” says Eric Reynolds, Chief Marketing Officer of Clorox.

The same approach targets consumers on nice weather days who own grills and and may be thinking of firing them up. That is how sales of Kingsford Charcoal have been increased.

2. CALL TO ACTION

Ask your people for tangible ways in which data mining is being used to increase sales. Ask how it might be used to identify new profit opportunities. Or answer any of a host of seemingly imponderable questions about customers, competitors, products and more.

That’s just my view. What’s yours?