Have you ever wondered how the online shopping portals show you products that match your preference or choice under the “Recommended for You” section? Did you ever notice a call center agent offering you food choices that match your taste, though you would have been talking to this agent for the first time? Well, all of this is possible by means of Predictive Analytics which is a genre of advanced analytics which helps in fathoming the future to a large extent. No, it is not a crystal ball or a soothsayer’s expertise, but it is that branch of analytics which uses the techniques of artificial intelligence, data mining, machine learning, statistics, Big Data methods etc. to arrive at predictions for future.
How does it work?
Mainly the predictions are based on the study of the nature and patterns of one’s past behavior, transactions etc. For instance, if you have been a regular shopper on an online shopping portal, then the next time around you will see similar kinds of products displayed for you to choose from based on your previous browsing or buying behavior.
- Predictive analytics works on the principles of predictive modelling by means of which it captures the associations across varied elements to evaluate risk with a definitive set of circumstances to assign a weightage or a score
- This is how big data and disperse attributes can be analyzed to arrive at trends after carefully studying the historical behavior
- Based on the probability that the historical behavior will be repeated given that the other conditions remain constant the trends should still hold good and therefore, the solutions or services offered based on the trends should work well
Different steps included in the process of Predictive Analytics are-
- Enunciating the project specifics
- Collecting the data
- Analyzing the data
- Applying statistics & modelling
- Deploying & monitoring the model
Benefits of Predictive Analytics
There are a number of benefits that can be obtained from Predictive Analytics.
- It helps one in understanding a buyer’s behavior. Therefore, if you are a marketer, then you can devise your marketing strategies based on the inputs via Predictive analytics so that your product or service can have a greater resonance across the customer base.
- Predictive models can help in mitigating risks. They have the ability to attach scores to a person’s credit health by assessing the individual’s payment trends, spending habits etc. Therefore, a probable financial fraud or risk can be averted by means of predictive modelling.
- Gauging the probability and intensity of monsoon rains helps avert situations that could have led to natural disasters or any other kind of exigencies
Apply Predictive Analytics in your business and establish a closer connect with your customers by understanding their behavior and spend pattern.