Disruption has made one thing very clear: it is no longer enough to recognize and leverage current trends; to be successful, today’s companies need to be able to recognize future trends and capitalize on those.
Enter Predictive Analytics (PA).
For a startup to ensure its own success and growth, they have to have foresight. Being able to predict trends that haven’t happened yet, as well as having the willingness to take action (when everyone else thinks you’re crazy) is what sets great companies apart.
According to a recent Accenture survey of 600 business executives, the use of predictive analytics has tripled since 2009, most likely because analytics capabilities have become more sophisticated and available. If you haven’t been using predictive analytics to help you identify future outcomes, here are 5 ways it can help your business succeed.
Understand Your Customer Base
Spending all of your time and resources on chasing new sales won’t help you if you don’t understand exactly who is converting. Predictive analytics can help you leverage the customer data you already have so you can better understand who you should be targeting.
When it comes to customer loyalty, PA can help you understand what behaviours and segments of your audience indicate a strong desire to continue consuming your content and buying your products and services. Perhaps even more important, PA can also tell you what is likely to trigger a switch to another brand.
PA is also a handy way to predict the net profit of a new customer relationship. Why spend time and money courting a certain demographic if it’s not literally going to pay off?
Efficient Marketing Campaigns
All businesses, particularly small startups, need to be able to predict the budget allocation for their marketing campaigns. PA can help entrepreneurs attribute value to each and every channel up and down the funnel, and that means getting more performance out of less spending.
PA eliminates the dreadful “spray and pray” marketing approach and allows business owners to identify wasted marketing dollars so they can focus on high-value prospects.
Optimal Digital Assets
Investing in digital assets like websites and mobile apps only make sense if you know you’re getting the most out of them. Using performance data can help guide your content strategy so that you can create pages and user experiences with a high likelihood of achieving your goals. Mining customer data will also give you insights into your segmentation so you can predict what groups of your customers are more likely to respond to different messaging.
Every business wants to do it, but only those using PA are able to. By using data to understand the exact factors that typically create risk and then predict when unwanted events are most likely to occur, businesses can mitigate risks. For instance, organizations can mine data to determine the factors to be associated with fraudulent activity. PA can also help identify at-risk accounts and what credit and payment terms to offer clients and customers. And finally, PA can be used to predict price elasticity, pricing gaps and thresholds so the value can be maximized when offering a product in the marketplace.
Maximized Operations Efficiencies
At the end of the day, it doesn’t matter how good a product or service is if a company can’t deliver on it. Predicting demand and supply chain management can be maximized when business owners leverage the power of predictive analytics.
These are just some of the ways in which predictive analytics can help organizations make informed decisions about future trends. Luckily, today’s tools, technologies, and approaches are making these analyses more and more accessible to just about every organization.