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There’s no doubt that a lot of business decisions involve guesswork. While this does occasionally work, the “gut feeling” approach to business simply isn’t viable; the business landscape is constantly shifting. Even though your gut-feeling comes from experience, you will often find yourself in new situations where you cannot merely rely on your intuition. It is necessary for businesses to eliminate guesswork from their decision-making process.
Predictive analytics provides a way for organizations to move away from intuition-based decisions to a more data-driven decision-making process. At its core, predictive analytics is simply the use of historical data and modelling techniques to predict future trends and outcomes. Basically, it’s looking to the past to make an educated guess about what may happen in the future. Making decisions supported by data is always going to be an improvement over going with your gut.
Here’s a short and non-exhaustive list of business use cases highlighting the benefits of predictive analytics: risk management, market segmentation, marketing campaigns, and customer retention.
Improving risk management
Predictive analytics enables the organization to accelerate risk management by using data relating to past risks, which can help in identifying areas of concern that may develop into future risks. Predictive analytics can also help the organization decide how best to deal with these risks.
Streamlining the market segmentation process
Despite its long-term benefits, market segmentation requires a high initial investment of time and resources, especially since some segments are based on behavioral characteristics, which cannot be quantified. Predictive analytics simplifies and improves the segmentation process by automatically analysing data relating to future buying behaviour (such as likelihood to purchase, likelihood to be a repeat customer, and likelihood to churn) as opposed to surface-level differences used in traditional descriptive segmentation (think different age groups, sports enthusiasts and the like). Using predictive analytics in market segmentation is known as predictive segmentation and is more efficient as it is largely an automated process and analyses relevant data.
Predicting the effectiveness of marketing campaigns
An organization can also use predictive analytics to anticipate the public’s reaction to a particular marketing campaign or promotional tactic. The data gathered from similar past interactions with customers can provide the organization with the insight it needs to choose the right approach.
Preventing customer churn
Obviously, no one wants to lose customers. Losing a substantial amount of customers is a sign that something’s gone wrong, and acquiring new customers is a lot more resource-intensive than retaining existing customers. Predictive analytics enables the organization to measure dissatisfaction among its customers and predict who is most likely to leave and seek out alternatives. The organization can then take steps to ensure the needs of these customers are being met, keeping them satisfied.
We’re doing our part
Organizations now have vast amounts of data at their disposal and are looking to leverage it in their decision-making. As a result, the predictive analytics market is growing rapidly, with some estimating it could be worth $35 billion by 2027—and we’re taking note. In fact, ManageEngine’s Analytics Plus already has predictive capabilities, enabling your organization to predict and plan resource requirements based on external and internal factors, plan IT asset expenditure, and detect potential vulnerabilities.
Additionally, you can identify key areas of improvement by comparing desired results with predicted results, facilitating continual service improvement. What’s more, Analytics Plus seamlessly integrates with ServiceDesk Plus, enabling users to track hardware and software usage, plan budgets, track ticket journeys, optimize infrastructure spending, increase agent productivity, and ensure compliance with service-level agreements (SLAs).
About Analytics Plus
ManageEngine Analytics Plus is an on-premises reporting and business intelligence service that helps you easily analyze your IT data, as well as create insightful reports and dashboards for informed decision-making. Click here to learn more.
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