Reasons to Get Into Predictive Analytics to Understand Events and Behaviors
Predictive analytics is a data based, problem-solving approach to understanding events and behaviors. It incorporates predictive modeling, machine learning, and data mining to meaningfully organize and interpret information about past events or actions and to predict the probability of a given scenario occurring.In the world of business, the most important scenario is the sale. Predictive modeling is a powerful method of finding the meaningful relationships that explain consumer behavior and using that information to your enterprise’s benefit.
Make Use of Your Existing Data, Discover New Market Opportunities
You already have data about your customers—purchasing history, demographic information, etc.—so why not put it to work? Granted, to get the best results from predictive analysis, you’re going to need all the data that you can get our hands on, which is a job for a professional data wrangler. But you’ve already got a solid foundation at your fingertips: data about the people who are already buying your product or service.Predictive analytics can take that data and help you to better understand how you can encourage the desired customer behaviors, from conversion to upselling. It can also provide insights regarding prospects for new product or service offerings that you can begin capitalizing on.
Economize Your Facilities and Resources
Once you’re able to better predict consumer behavior, that knowledge will have wide-reaching effects within your enterprise. You’ll be better able to anticipate your needs in terms of raw materials, supplies, and digital capabilities. Likewise you’ll be able to predict and prepare for upcoming staffing and skill needs, production schedules, surges in shipping and demand, and pricing trends—all to maximize your efficiency and revenue.
Nip Risk in the Bud
Once you’ve established a viable model of consumer behavior, you not only have a way to boost earnings—you also have a way of mitigating risk. This ranges from foreseeing shortfalls in supply to waning demand to anticipating risk. And the value isn’t just in market interactions; predictive analytics can also help you manage risk internally. A more accurate understanding of employee motivation and behavior can help managers effectively target their efforts toward minimizing employee risk and dealing with the causes of risky behavior.
Beat the Competition
All of the reasons listed above will make your enterprise more competitive—that goes without saying. But it’s important to remember that you won’t be the only one using predictive analytics to achieve those things. With data proliferating at ever-increasing rates, more and more organizations (private and public alike) are looking to turn as much data as possible into the most effective information possible, thereby enhancing their own operations. In other words, if you’re not on the predictive analytics bandwagon, you’re going to get left in the dust.Effective predictive analytics requires maximal data, sophisticated algorithms, and a specialist’s keen eye. Constructing and deploying your information takes time, resources, and effort, but the benefits will certainly leave you glad that you made the investment in each.