[jbox radius=0]Data Mining

Data is Money!! Time is precious.

You don’t give away your time so why would you give away one of the most valuable by-products of your business? Yet, many business owners just don’t understand the detailed information that is produced by their data systems including POS systems.

Data is a non-tangible item. Since it is not concrete most people think it is of little value. Your store name and reputation is also non-tangible yet people pay lots of money to use a name via Franchise agreements. You may not think your data is valuable but it is extremely valuable to marketing companies. They want and will pay dearly for a look at your customer data, purchases, and buying habits. Don’t you deserve adequate compensation for and protection of such valuable information?

Your data contains valuable information

Think about it – Each transaction contains every item purchased, your pricing and discount information, and all payment details. From a marketing perspective, that’s the holy grail! The key to developing the right products, establishing the best price, co-marketing complimentary items, and marketing against competitive products. From a vendor perspective, discounts can be validated through verification of items sold through your POS system instead of what was purchased and possibly diverted. That too is marketing information and the purpose of discounting.

Vendors and manufacturers PAY to understand customer behavior. Many companies have sold their transaction data to companies like IRI, Nielsen, and Catalina. Your data may be used in ways to help you or harm you. Knowledge is built from data in the marketplace. Your transaction data is critical to building knowledge used to make business decisions. The details of every purchase from every transaction, every customer, every day is very valuable.

Cloud-Based Services

A new technology shift is coming. Are you using cloud-based software? Did you read your contract/agreement when signing up for those services? Beware the temptation to trade customer data privacy for lower costs. Often cloud services will mine the data on their servers for profit. This means your customer data could easily fall into the hands of anyone willing to fork over the cash, including your competition. Before signing up for any cloud-based service be sure to read your terms of service and privacy agreements thoroughly.

Data Mining is Easy

Data Mining
Data mining is easy with today’s software tools. Software exists that will scan through your transaction data at lightning speeds and extract information like the following:

  • best price to maximize item sales
  • peak time of day for sales of a specific item
  • most commonly purchased item with the item of interest
  • incremental sales when discounts are offered
  • and much much more!

Where is your data going? Does your competitor get your data? Is your sales and transaction being sold to users that you would not approve? How do you know where your data is going? What other information is being collected along with your transaction data? Would you knowingly and freely give your sales information vendors, competitor, manufacturers, government agencies, etc? How much would you charge to allow someone to go through your books, receipts, sales data, item prices, and item costs? Did you get a data information use and privacy agreement/contract? If so, did you read it?

Internal and External Data

Do you have a Loyalty/Customer or In-house charge file? Typically, customer names, addresses, email addresses, birthdays, etc. are part of your customer file. Do you want that information to be sent to third-parties that can sell or distribute those private details about your customers?

What about your cashier’s behavior? Are you aware that everything that each cashier does is recorded in the transaction log files on your POS system? And, that’s the information data miners are uploading to their servers and analyzing.

Would you approve all of your cashier details to be provided to strangers, competitor, vendors, marketing firms, or ad groups? Do you have a cashier number used to ring transactions? Do you want to be tracked, monitored, and analyzed?

Why should my POS provider care?

Why does your POS provider care? Security! Protecting your assets is their responsibility! A quality point-of-sale solutions reseller/dealer has invested in technology to control the unauthorized loss and flow of data from your system. Has your provider made these investments?

Is there a security war?

There is no security war because people don’t seem to care. Business owners aren’t protecting their data assets. This could be because many owners are simply not aware of the importance of their data. They may be swayed by perceived savings, fail to read privacy agreements and contracts, sell their data below market value, or a variety of other reasons.

So, when a company, vendor, partner, or other entity comes to you offering money for your data, you should think carefully about what you are selling. By selling this data you are giving permission for it to be used in any way that the purchaser determines. Don’t give away your most valuable assets!