The uses for predictive analytics are virtually limitless. As more companies embrace digital transformation and look at their data for strategic insight, the ways you can use this technology will grow.
Predictive analytics leverages past and present data to make strategic predictions about future events. This technology can’t see into the future, but by identifying patterns and trends, it provides valuable insights about potential outcomes. Predictive analytics solutions drive many digital strategies, which resulted in a predicted 27.4 percent compound annual growth rate between 2015 and 2020. You can use this technology to support your digital transformation in many innovative ways
Personalized Customer Experience
Customers travel through a virtual sea of irrelevant marketing messages daily. Mobile ads, spam, billboards, commercials and other advertising displays use a one-size-fits-all approach for the customer experience. Your customers tune that noise out, but they still pay attention to truly relevant experiences. Predictive analytics can help you with everything from deciding which articles your prospects would enjoy to choosing the right time of day to send them an email.
Retailers and e-commerce stores depend on keeping the right inventory on hand to meet customer demand while minimizing slow-moving merchandise. Use predictive analytics to determine trending products, such as an up and coming fashion designer or a seasonal color that’s flying off the shelves. Your inventory management processes can reference the product predictions to determine whether to order more highly desirable items. Businesses with multiple locations must keep regional differences in mind, particularly if they’re selling outdoor goods or other season-sensitive inventory.
Impact of Price Changes
Proper pricing is part art and part science. Many factors influence whether these changes have a positive, negative or neutral effect on your sales. In many cases, changing product cost requires you to print new marketing material, alter price tags and change website content. You invest many resources into your pricing strategy, so predictive analytics lets you know the likelihood of a sales lift.
Multidisciplinary teams help your organization leverage different perspectives, compared to teams created from the same department. Identifying the right employees to work together previously relied on a manager or the human resources department making that decision. They went with gut feelings or infrequent performance reviews, rather than using hard data. Predictive analytics identifies employees whose skills and performance would fulfill team requirements. It can also recommend internal and external collaboration opportunities.
Fraud plagues many industries, especially financial services and healthcare. You face everything from the teenager using his parent’s card to a cyberterrorist group trying to launder money internationally. These activities can cause substantial harm to your organization and make it difficult to process legitimate transactions. Use predictive analytics to look for behavior that historically indicates fraud, as well as markers for suspicious activity. Your solution can stay up to date on the latest fraud methods and automate substantial parts of the process. While it catches the smaller-scale activities, you can focus on particularly complex cases to improve your chances of stopping big losses.
Higher education institutions face a very competitive marketplace, and many organizations turn to digital transformation to gain an advantage. They have a vast amount of student data available, which provides insights such as whether the students are progressing in their degree path and if they are at high risk for transferring or dropping out. The university can reach out to these students and provide them with the resources they need to grow and thrive at the school.
Your organization has too many advertising channels and not enough budget. You need to target the right places to reach your target audience without overspending. Your previous campaign data gives the predictive analytics solution enough information to recommend the best performing areas for that particular market segment. Use this tool as the centerpiece of your optimization strategy so you get the most out of your advertising dollars.
Projects frequently shoot past their milestones and deadlines. As many organizations have interdependencies between projects, a delay in one could cause a company-wide disruption. Productivity plummets while employees scramble to make up for lost time. The project managers or stakeholders may plan the schedule around the best-case scenario; however, in the real world, you rarely encounter these optimal conditions. Employee illness, unexpected errors, market disruption and hundreds of other factors throw the project off track. Predictive analytics gives you a more realistic schedule, which can be adjusted to changing conditions. A particularly productive week could accelerate the timeline while system downtime could set the completion date back a month.
You may use a marketing funnel and sales pipeline to match assets to each buyer stage, but do you really know your customers’ purchase intent? Today’s customers don’t follow a linear path on their journey, so the traditional model may not accurately represent what’s actually happening. Analyze the data for the customers’ purchase intent, which predicts how close each prospect is to a purchase.
The uses for predictive analytics are virtually limitless. As more companies embrace digital transformation and look at their data for strategic insight, the ways you can use this technology will grow. Are you curious about what your data has to say about your future? It’s time to start on the path to predictive analytics.