In the famous Hollywood film Minority Report has prevented law enforcement authorities of all murders in Washington. With the premonitions of Pre-Cogs – three people with mental Chief John Anderton (Tom Cruise) introduced a position to foresee crimes and arrest the offender is served from harm
As demanding customers and competitive. increasing pressure as never before, it would be cool if we foresee as a business manager could do what everyone will do their next customer, which in turn the result?
Think about it. A typical conversation in a telecommunications company would be “Hi Tom, I can tell you that Mr. Jones and Mr. Parker, the switch to a competitor is next week. What do you think we should do to keep them?” This insight is Powerful!
Well, Predictive Analytics, you can do just that.
predictive analytics encompasses a variety of techniques from statistics and data mining that analyze current and historical data to make forecasts about future events. It is used in virtually all functions of an organization, including Sales & Marketing, Human Resources, R & D, production, operations, logistics, risk management, finance & accounting is, you name it. The three most important benefits derived include revenue generation, cost optimization and risk management. Allow me a few examples:
? Revenue Generation – Let’s say you bring a new product variant. While you have a good idea (based on the gut, some market research and basic statistical modeling), one can never really tell which customer segment is likely to buy. Predictive Analytics enables you to show exactly which segments of customers buy most of this new offering. It will be the understanding of the customers not to buy and probably only buy when it come with a special offer – with enormous granularity. This ensures that you spend your marketing and communications channel to the right audience.
? cost optimization – are in general supply chain costs form a significant part of the cost base of product marketing. Optimizing the supply chain is a key challenge. Take the example of the media and entertainment industry. Each new DVD release distribution to outlets not regulated by a demand forecast. As a result, there are cases of both stock-outs and over-stocking. DVDs sent back out increased distribution costs. And shipping DVDs again cause lost sales if they arrive late. Step in Predictive Analytics – to develop a predictive model helps to estimate consumer demand demographics store to store, and historical features of the sales. Mistake in the classification of DVDs can be reduced over 40%!
? Risk Management – This is one of the most important areas in which predictive analytics is used in today’s economic scenario. Take the example of a retail bank, where predictive analytics enables organizations to assess both risks and opportunities: the customers are likely to default on loans, which likely to be profitable, long-term customers? Predictive Analytics helps clients that are most likely to default and armed with this knowledge about the expected consumer behavior, the Bank may make decisions on the marketing of new products in order to make this customer segment.
Predictive Analytics have seen work very well with the customers with clear tangible results. Chief John Anderton had to 2054 are waiting to see into the future, with predictive analytics, you can do so now – and fast
Most of the hearing from us on the music end of a generic mass marketing call rejected a rule (often not too polite) the “special offer”, before half-time telemarketer is the script. As a result, it is not surprising that this approach produces very low response rates, and presents a challenge for the marketing departments’ ROI.
But this view. You get a call where the telemarketer hits a sweet- Spot a complimentary 4 days / 3 nights
vacation at your favorite resort, not to you in a while … suddenly the deal does not sound so bad, the car insurance cover prices – you hate insurance to pay for a new car -.! and good, why not … sounds familiar, if so, have you profiled effectively
The representatives of the company knew that this at this time of year when you to take your holiday and put the right offer at the right time. The key to this success is Predictive Analytics. Historical customer demographic and purchase data was extracted automatically and customer behavior and relationships information was captured to predict buying behavior for specific customer segments. This method helps marketers are most likely to purchase products, and a rating of your interest to them.
Predictive Analytics helps sales people understand what you previously purchased and the offer that you are most likely to jump in at the future. In a sense it like looking at the mirror and then changing lanes. You could say Predictive Analytics for specific prediction of a potential client and personalized product recommendations, which include helping you to sell quickly is used. Having said that, this is just one of many mainstream applications of predictive analytics.
given the difficult economic times, when this seemingly simple discipline can help to maximize ROI, minimize risk, and especially to create satisfied customers it certainly deserves serious consideration.
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