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Kathleen Martin
Guest
Analytics is an important part of managing a business today. There are many types of analytics techniques, with predictive and prescriptive analytics being two key ones. But what is predictive analytics, and what is it used for?
Predictive Analytics Today describes predictive analytics as "The branch of advanced analytics which is used to make predictions about unknown future events." It "uses many techniques from data mining, statistics, modeling, machine learning and artificial intelligence to analyze current data to make predictions about the future."
Using patterns found in historical data, it's possible to identify risks and opportunities for the future. Organizations that use this form of data analysis can anticipate future outcomes, identify risk and are better positioned to make decisions.
Analyzing Structured and Unstructured Data
This type of analytics can be performed on both structured data and unstructured data. Structured data, things like age, gender and sales figures, can be used to track customer trends.
Unstructured data, such as notes from call center agents, or customer feedback can be used to identify customer sentiment and build predictive models.
Predictive vs Prescriptive Analytics
Predictive analytics is not to be confused with prescriptive analytics. Nicole Fallon of Business News Daily describes prescriptive analytics as taking "A more technological approach," and offering a "Deeper look into the 'what' and 'why' of a potential future outcome."
Prescriptive analytics takes past data and uses it for projections, but it allows analysts to tweak variables to determine what changes they'd need to make to achieve a specific outcome.
Predictive and prescriptive analytics are often used in tandem. Fallon explains, "Predictive analytics helps find potential outcomes, while prescriptive analytics looks at those outcomes and finds even more paths of options to consider."
Related Article: How Can Predictive Analytics Impact Customer Experience?
What Are Predictive Analytics Used For?
Predictive analytics can be used to tweak and test processes across a variety of industries. Earl Sires, a digital content marketer at Rapid Insight explains, "Many industries use predictive analytics as a core part of their strategy."
Some common use cases include:
Predictive Analytics Today describes predictive analytics as "The branch of advanced analytics which is used to make predictions about unknown future events." It "uses many techniques from data mining, statistics, modeling, machine learning and artificial intelligence to analyze current data to make predictions about the future."
Using patterns found in historical data, it's possible to identify risks and opportunities for the future. Organizations that use this form of data analysis can anticipate future outcomes, identify risk and are better positioned to make decisions.
Analyzing Structured and Unstructured Data
This type of analytics can be performed on both structured data and unstructured data. Structured data, things like age, gender and sales figures, can be used to track customer trends.
Unstructured data, such as notes from call center agents, or customer feedback can be used to identify customer sentiment and build predictive models.
Predictive vs Prescriptive Analytics
Predictive analytics is not to be confused with prescriptive analytics. Nicole Fallon of Business News Daily describes prescriptive analytics as taking "A more technological approach," and offering a "Deeper look into the 'what' and 'why' of a potential future outcome."
Prescriptive analytics takes past data and uses it for projections, but it allows analysts to tweak variables to determine what changes they'd need to make to achieve a specific outcome.
Predictive and prescriptive analytics are often used in tandem. Fallon explains, "Predictive analytics helps find potential outcomes, while prescriptive analytics looks at those outcomes and finds even more paths of options to consider."
Related Article: How Can Predictive Analytics Impact Customer Experience?
What Are Predictive Analytics Used For?
Predictive analytics can be used to tweak and test processes across a variety of industries. Earl Sires, a digital content marketer at Rapid Insight explains, "Many industries use predictive analytics as a core part of their strategy."
Some common use cases include:
- Fundraising
- Health care
- Marketing
- Insurance
- Supply chain management
- Risk Management
- Predictive Analytics in Fundraising
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Fundraising requires building connections and relationships with potential donors. Sires explains, "Predictive modeling allows you to plan your fundraising calendar strategically." This means fundraisers can get the right communications out to prospective donors at a time when they're likely to respond positively.
Predictive Analytics in Health Care
Health care workers can use data in a variety of ways to improve the efficiency of the service they provide. Effective use of patient data can also help improve patient outcomes.
Continue reading: https://www.cmswire.com/customer-experience/what-predictive-analytics-are-and-how-they-can-help-your-business/
