Predictive Analytics Strategy for Intelligent Planning and Analysis 07 Jan 2015

Predictive Analytics Strategy for Intelligent Planning and Analysis

When your company is faced with questions like the following, how do you get the right answers?

  • What are the buying habits of your customers?
  • Is your business making the best use of marketing resources?
  • Who are your most promising potential customers?

For difficult questions like these, predictive business analytics can help replace guesswork with data-based decision making — companies like PepsiCo, Procter & Gamble and Amazon are already demonstrating how successful predictive analytics is in practice. Guesswork is not a winning strategy!

Regardless of how big or small your company is, understanding consumer behavior is likely to be a key to your company’s success. Whether you need to choose the “right price” or optimize your supply chain, employing business analytics can help you to level the playing field with competitors of all sizes.

Predictive Analytics: The New Wave

A few years ago, many business owners and executives probably viewed predictive analytics as “nice to have.” With the passage of time and the ability to see “real world results” for business analytics, it is now apparent that predictive analytics can delight your customers while also increasing revenues — what’s not to like about that? Here are several examples of how the new wave of predictive business analytics in a data-driven universe has given companies the power to quickly and accurately predict future trends with data mining:

  1. Propensity to Buy, Convert or Engage: For example, effective use of predictive analytics and data mining can improve email and direct mail campaigns while also helping you decide how to use discounts in a more targeted fashion.
  2. Up-Sell, Next-Sell and Cross-Sell Recommendations: Business analytics can help you influence consumer behavior. For example, by providing needed tools to increase your average order size for both current and future transactions, data mining will lead to increased sales revenues.
  3. Brand-Based, Behavioral and Product-Based Clustering: Customer-buying behavior has become more complicated and is frequently impossible to understand without data management help. For example, developing behavioral clustering algorithms will enable you to analyze how customers behave during their purchasing decisions.

For most companies, improving in just one of the areas noted above will fully justify going “full speed ahead” with data mining and predictive business analytics — imagine doing better in all of them!

Benefits of Predictive Analytics

What will predictive business analytics do for your company? According to a survey by SAP, here are the three leading benefits of predictive analytics:

  • Improving Business Performance — Reported by 61 percent of companies.
  • Achieving More Insight into Business Operations — Noted by 50 percent of businesses.
  • Making Better Use of Existing Data — 49% of business owners and executives.

While not all companies initially experience positive results with predictive analytics, SAP reports that only 15 percent of companies have failed to demonstrate positive business outcomes. One way to improve these results even more is by working with a data management partner such as Research Optimus.

The top three business functions for business analytics — sales, finance and marketing — all play a critical role in most business organizations. For about 66 percent of American companies using predictive analytics, a primary benefit is exploiting business opportunities — for the other one-third, minimizing risk is perceived as the paramount benefit. This is a “win-win” statistic for predictive business analytics since both benefits are of critical importance within any business enterprise.

Conclusion: Empower Everyone with Predictive Insight

The wealth of data in a data-driven economy can be intimidating to even the biggest corporate enterprise if decision-makers fail to act as leaders and managers — effective use of predictive analytics and data mining are critical tools in achieving a successful business outcome.

The best and most profitable results will typically occur when all of your employees are empowered by having predictive analytics tools at their fingertips on a daily basis. When companies do this, it is typically a “Eureka!” moment that changes everything forever. Don’t be surprised when you reflect backward in time and ask, “Why didn’t we do this sooner?”

This is, of course, a big step for any company to undertake. Don’t make the mistake of trying to do everything yourself — enlist the services of predictive analytics experts like Research Optimus before starting your data management journey.

One of your first steps should be to discuss the use of predictive analytics with your friends and business colleagues — one way to start the conversation is to share this article by using social media buttons. You should also feel free to share your business analytics experiences by leaving a comment below.

– Research Optimus

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