Tools I’ll be using for the Demo:
Excel 2010
SQL Server 2012 (specifically SQL Server Analysis Services)
Excel Add-in for Excel.
Sample data-set that comes with the excel add-in
Scenario:
Marketing Department needs to create Targeted Mailing list.
What data do we need?
To create a Targeted mailing list – we’ll need a historical data-set of customer purchase history
What will we do with the data?
Based on the historical data-set, we’ll be able to find “patterns” in the past consumer behavior. E.g. A single male going to college living in Europe is likely to buy a bike. And the using these patterns – we would then classify NEW customers.
Technically, we’ll be using the classification method using the Microsoft’s decision Tree algorithm
(Read the difference between classification and clustering)
Let’s get in action!
STEP 1: Build a Model
Data Mining Tab > click on classify:

Follow the steps:

Select the data:

In this case, since we want to predict the likelihood of buying a bike – our column to analyze is BikeBuyer

For the Demo, I am going to just leave it default. There are “optimization” steps that you can do but for the demo I am going to keep it super simple

Name the model:

The Model has been created!

STEP 2: Query the MODEL to predict the likelihood of bike purchase of a new customer

Select the model:

Select the data:

Specify the columns that would be used in predicting the likelihood:

Add the column that will have the “predicted value”

And example of Data Mining Expressions (DMX):

For the demo, I am just going to add the column to the existing table:

Yay! Here’s our Targeted Mailing list – see the last column:
Screenshot 1

Screenshot 2:

Now what?
Marketers can now send “coupons” to ONLY those people who are most likely to buy a bike! And so that’s how you create a targeted mailing list using the Excel Data Mining add-in.
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