If you’re a business, you have decisions to make that earlier solely relied on intuition and guesses. But thanks to Internet of Things (IoT) era, Predictive Analytics has started to play its role and with voluminous data available, your decision-making processes can become more accurate than before and churn out results proving to be profitable.
Now if this was too much of jargon for you, how about we break it down into simplified bits and take it step by step?
With the advent of social media and people shifting to internet and making their profiles on various social media platforms, a huge database was automatically set up. This allowed big companies to make use of the excessive amount of information available on their existing and potential buyers, and with a variety of techniques such as machine learning, data mining, artificial intelligence and statistical algorithms, Predictive Analytics came into play. The idea was to make forecasts on various business aspects without actually making the investments, thus eliminating a large percentage of risk. Albeit, the predictions based on the said techniques are not 100% accurate, the risk is highly minimized by relying on the data analysis based on consumer behaviors, market patterns and industry insights.
To substantiate how Predictive Analytics can help your business grow, look no further than Amazon – the e-commerce giant – who was able to increase its sales by 30% with the correct use of data mining. Another example is E-bay, who with the right kind of customized marketing, forecast on customer’s preferences and identifying potential segments was able to get fruitful results.
Let’s now look at some ways this methodology can help your business
Product Diversification
Whether you are a large conglomerate or a startup venture looking into diversification of your business, Predictive Analytics can help you make an informed decision. By looking into the potential market, consumer behaviors and industry trends it is now more convenient than ever for businesses to determine feasibility before making tangible investments.
Fraud Prevention
Based on massive amount of data available, credit history and previous records, you can now easily identify potential scams or fraudulent consumers. This largely helps in finance and banking sector where a candidate has to be thoroughly assessed before handing out loans and lease offers.
Customize Marketing
There is no point in throwing all sorts of marketing material left right and center without looking at the audience its being distributed to. Predictive Analytics deeply digs into the demographical information such as age, gender, socio-economic background and helps you determine the right kind of marketing medium and material for a specific, target audience. This not only saves resources but also prevents from advertising saturation which may just put off a potential buyer.
Customer Behaviors (Predictive Modelling)
Based on a customer’s buying preferences, past purchasing trends, current interests, analysts can help you find out your potential buyers in the large untapped market. It sounds even better when the technique comes to be handy in retaining your existing customers by providing just the right kind of offers, products, advertisements and features that competitors lack in.
These are some of the many brilliant utilities of Predictive Analytics, and with the right team of data analysts, successful business decisions are at your fingertips.