What might several application areas be for predictive analytics?
Monday, January 28th, 2008The other day a friend of mine was asking me about possible business areas in which predictive analytics could be used. I told him that the use of predictive analytics was limited only by the imagination of the people using it and the availability of data to create the models. Because he wanted a more concrete answer, I mentioned these examples (I hope they would give you some ideas on how to use predictive analytics in your organization):
- For Financial Institutions:
- Response: Which customers are likely to respond to a specific offer such as a lower interest rate on credit card.
- Cross-sell: Which customers will apply for a mortgage given they already have a credit card with us?
- Up-sell: Which customers will upgrade to a platinum card given that they have a gold card?
- For Retailers:
- Supply Chain Management: What products are sold together?
- Sales: What key factors are associated with predicting our sales? (location, store size, promotions, etc.)
- For Web-based Companies:
- Web site optimization: How are the users in Calgary different from those in Edmonton with regards to how they navigate the site?
- For Cable Companies:
- Churn: Which customers are likely to leave and sign up with another company?
- For Nonprofit Organizations:
- Donor identification: Who will give to us? Who will renew?
- Strategic planning: Are we investing in the right areas to attain our campaign goal?
