Companies are increasingly using predictive analytics to achieve greater business outcomes.
This includes the use of predictive analytics with customer data, including transactional, behavioral, preferential, and customer sentiment data, which enables companies to deliver more relevant offers, messaging, and services that can result in higher customer conversion rates and greater profitability.
Companies are also using predictive analytics to identify opportunities for making enterprise operations more efficient (e.g., spotting anomalies in supply chain operations or opportunities for streamlining infrastructure).
But to truly maximize the benefits that predictive analytics can generate for enterprises, it is critical for organizations to gain even deeper business and operational insights so they can become more proactive.
The pace of business and the rise of the real-time enterprise are leading more companies to shift from reacting to customer and market changes to anticipating and acting on industry swings before they occur.
According to a TDWI report, “to compete effectively in an era in which advantages are ephemeral, companies need to move beyond historical, rearview understandings of business performance and customer behavior and become more proactive” so they can anticipate customer behavior and events and generate more successful business outcomes.
For companies in industries where customer churn is high, such as telecommunications, business leaders can use proactive applications of predictive analytics to get ahead of customers before they defect.
For instance, historical data may enable marketers for a wireless carrier to determine that 40 percent of subscribers jump ship once their two-year contracts have expired. Market data may further inform the carrier that one of its rivals is offering a 10 percent discount to new customers.
Marketing leaders can blend these insights with other information, such as behavioral information about specific customers whose contracts are about to expire, to generate customized offers that are aimed at providing the services they want at prices that benefit both the customers and the company.
Proactive analytics also offers executives opportunities to foresee market or economic shifts that can be used to deliver business benefits.