What is Predictive Analytics and What are the Benefits?
Most businesses use data to analyze past behaviors and patterns to inform decision-making going forward. But analytics aren’t just limited to observing past and real-time data to help craft the best strategy. Predictive analytics is a form of advanced analytics that uses current and historical data to make predictions about future outcomes and behavior through a combination of data mining, machine learning, and statistical modeling. This form of analytics can be advantageous for identifying potential concerns or opportunities in your business, and it has applications in a wide range of industries.
What can predictive analytics be used for?
Using data to make predictions has numerous applications for businesses. You can use it to inform strategies in areas such as:
- Marketing: Using past behavior to predict customer tendencies and using that information for strategies, such as promoting products.
- Operations: You can use predictive analytics to anticipate trends that can help operational tasks, like managing inventory.
- Risk: One of the most famous examples of predictive analytics is determining credit scores, including how likely a customer will default on debt.
Industries as varied as banking, marketing, sales, retail, healthcare, public safety, and human resources are utilizing predictive analytics to inform the way they do business.
Which industries use predictive analytics?
Predictive analytics serves an expansive variety of industries, from retail to manufacturing. Here’s a look at how some of them use predictive analytics to help serve their business:
- SaaS: SaaS businesses use predictive analytics to be proactive in identifying customers who are likely to churn and focus their efforts on keeping them with the brand.
- Telecommunications: Major telecoms have used predictive analytics for fraud and bad debt reduction, call center optimization, and price optimization.
- Retail: Retail organizations use predictive analytics for marketing issues like price optimization, promotional initiatives, and selecting, buying, and displaying merchandise for the highest return on investment.
- Healthcare: Predictive analytics has aided health insurance companies in identifying fraud and patients most at risk for major health issues.
- Manufacturing: Manufacturers have utilized predictive analytics to reduce warranty claim costs, identify trouble areas in production, and optimize parts and service distribution.
Predictive analytics utilizes data to predict future trends and behavior
With more and more companies using data to drive smart business strategy and decision-making, it’s important to utilize data not just to look into past behavior and trends, but to look toward the future. You can use predictive analytics for competitive advantages, including improving efficiencies in operations, reducing risk, and sharpening marketing and sales strategies. The versatility of predictive analytics makes it a worthwhile investment to be on the cutting edge of business intelligence.
Looking for solutions to make the most out of your business’s data? Scuba Analytics offers a number of tools to give you actionable intelligence, including predictive insights. Learn more here and speak with an expert today.