Hello, my name is Naomi Burgess and I’m going to tell you a little bit about the concept of predictive analysis and how you can take advantage of it to make your business stand out from the crowd and increase your earnings, as well as reduce most of the possible risks and anticipate your clients’ needs.
What is Predictive Analysis?
Essentially, predictive analysis is a probability calculator, a concept that allows for extracting data in order to establish various patterns and predict future trends in your chosen industry and for your chosen business. It can definitely be a way to get heaps of customer data on your side and capitalise on them. Yes, heaps – most of the consumer data as we know it has been gathered within the last few decades. The landscape of the world hasn’t stopped changing and evolving for even a second and as a result, there was more than enough data produced.
Why it is important?
Given the nature and the size of such data, it’s not surprising that businesses can be overwhelmed by it, which is where predictive analysis comes in. It’s not fortune-telling – it’s a technique that can truly help you by analysing facts from history and current trends to find patterns and make forecasts. It can also carry out risk assessments and present you with several what-if scenarios, so that you can plan your business development accordingly. For example, it can carry out, based on past events and current trends, a credit risk assessment you might need. Perhaps the most well-known example of employing predictive analysis is credit scoring, which can provide you with a client’s credit history and other data and rank your clients by their creditworthiness.
Types of Predictive Analysis
There are several types of predictive analysis method; first, there are decision models that outline the relationships between all the elements of making a business decision, one example being optimization; second, there are descriptive models that analyse relationships between several customers or products, for example, descriptive models are invaluable in cross-selling; finally, there are predictive models that calculate the likelihood of event A influencing event B and the possible results – crime scene analysis and fraud detection are two common examples of employing predictive models.
Benefits of Predictive Analysis
By using the historical data and current industry and business tendencies, predictive analysis studies the clients’ expectations, product trends and the risks associated with various things in the past to create a business forecast for the future for you. To give you an example, several UK retailers from the hospitality industry use the data gathered by loyalty programs to determine and anticipate what a guest might be interested in in the future and create promotional material to be distributed to the client accordingly. Employing a strategy that incorporates predictive analysis into the core of a business puts the company ahead of its competitors – predicting marketing and target audience trends can enable the business to plan in advance and make the most of the information obtained with the help of predictive analysis.
The Success of Predictive Analysis
The predictive analysis concept has proven to be very successful in the past few years. To give you some examples of companies that successfully employed the predictive analysis technique, Google and Facebook have done so and I doubt I have to tell you about how successful these two digital giants are! Their focus on the future, their use of modern concepts including predictive analysis, and their determination to stand out from the crowd are only some of the reasons they’re doing so well, and predictive analysis is a big part of it.
Invest in Predictive Analysis
One thing you can learn from Facebook and Google is how they had taken advantage of the data available to them and used it properly. Investing into predictive analysis professional skills might cost your business more in the short-term than simply installing a software package, but it would help you more in the long run, for years to come. Software packages can be good for certain businesses, but employing well-trained professional would almost always be a better strategical move. Predictive analysis doesn’t seem to be going anywhere anytime soon, and it would be a good idea for you to decide to take advantage of it, in a way that works best for your business. Google and Facebook are making themselves stand out from the competition with the help of predictive analysis, and you should take a leaf out of their book.
Other Predictive Analysis Softwares
However, very few businesses can afford what Google and Facebook can and unfortunately, not many companies are willing to spend their money on hiring predictive analysis specialists, and UK and European businesses are more reluctant to do so than their US counterparts. For those of you who are still skeptical about the concept, there are several software packages available that can carry out predictive analysis for your company. However, as I mentioned earlier, I’d advise you to invest into the skill nonetheless. Google and Facebook, our two examples of US companies, are only two cases out of many who had taken predictive analysis and turned it from a “fancy new concept” into one of the pillars that supports their businesses.