Predictive analytics: Underrated and underutilised
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Advanced analytics can be used to address a multitude of business problems, but many businesses aren’t utilising the insights and predictions from analytics to their full advantage, according to CenturyLink.
Martin Hooper, CenturyLink head of business development Australia, says, “Predictive analytics uses modelling, machine learning, and data mining of historical data to make predictions about the future.
“This can help companies with tricky tasks as diverse as managing future risk, identifying potential opportunities, and making the right decisions fast when implementing new projects or strategies.”
CenturyLink has identified the key ways in which predictive analytics can support enterprise-wide strategies.
Understanding your customers
Due to the fact that predictive analytics draws upon past customer behaviour data, it can help determine optimal customer segmentation, cross-sell and up-sell modelling, loyalty and retention modelling, and customer lifetime value, CenturyLink says.
Given that the customer is usually at the centre of most projects, this is a vital aspect for enterprise-wide strategies, according to the company.
Predictive analytics can provide the insight to inform marketing mix modelling, conversion modelling, the optimal mix of offer and channel, and can also help to work out the effectiveness of particular promotions.
This insight touches all parts of the company’s marketing activities, CenturyLink says.
Making pricing decisions
The technology behind predictive analytics can inform pricing decisions, one of the most valuable levers that companies can use for competitiveness, says CenturyLink.
Pricing analytics can inform price optimisation, price sensitivity, market basket insight, and identify the best product for companies to offer next to the customer.
Managing the supply chain
Supply chain analytics, driven by predictive analytics, can help companies forecast demand, identify key purchase drivers, inform supply and demand simulations, and provide predictive inventory maintenance, CenturyLink says.
Risk underlies any enterprise-wide project - the chances of something going wrong or forecasts not living up to the realities are real concerns for large projects, says CenturyLink.
Risk analytics provides organisations with stress testing, fraud detection, loss forecasting, and capital reserve forecasting; all of which help to make sure a company-wide strategy remains sustainable in both worst- and best-case scenarios, according to the company.