You never know the value of the useful until you know the value of
the useless.
-Chinese proverb
Why data mining is so important
Each year, advertising executives spend millions of dollars doing market segmentation
studies. They run telephone surveys and collect product registrations. They stand at the
entrance to the mall and ask shoppers questions as they come and go. And what do they do
with all of this precious data once it is collected? They mine it. They analyze it to find
out who is buying what and why. Perhaps more importantly, they find out why people don't
buy products.
All of this is done because they realize the importance of targeting their ad campaigns
appropriately for their audience. They understand that an individual must perceive a
message as being important and relevant to his or her own situation before that individual
will pay attention. Further, advertisers understand that their message must be
sophisticated enough to carry meaning for a prospective consumer, but not so sophisticated
so as to go right over his or her head.
Data mining is just as important for plan sponsors and providers who are trying to
reach employees with varying demographic characteristics and education levels as it is for
advertisers trying to market goods and services to the diverse American populace.
Mining employee data
Investment Horizons can analyze your employee data to help you get a better
understanding of the demographics of your employee base. The exact nature of the analysis
depends on both the goal of the client and the availability of employee data. However,
some of the questions which can be addressed are:
- How do participation levels vary among employee's of different ages?
- How do contribution rates vary among different employee categories?
- Is their a correlation between participant asset allocations and their incomes?
- Are employees in one location more likely to invest in company stock?
- Are your employees on track for a financially secure retirement?
