Predictive analytics is a powerful tool for businesses to gain insights and make better decisions. This is a data analytics model that uses your historical data to determine future trends.
It can be used to analyze past data and identify patterns, trends, and correlations to forecast future outcomes. Predictive analytics can help businesses maximize their profits, increase customer satisfaction, reduce costs, and more.
How Does Predictive Analytics Work?
We can quickly analyze large amounts of data and arrive at more accurate results in a shorter span of time.
These models can be trained to analyze large datasets and identify patterns that would otherwise go unnoticed. This can be done by leveraging powerful machine learning algorithms and statistical methods. This technology has a wide range of applications in fields such as finance, healthcare, manufacturing, entertainment, etc.
The four steps in predictive data analytics are:
- collecting data
- cleaning data
- identifying patterns
- making predictions
Predictive analytics techniques include the use of:
- decision trees
- regression models
- neural networks
- data mining
- classification models
- time series analysis
- machine learning techniques
At Mactores, we use a combination of statistical methods and machine learning in predictive analytics. Both methods have different use cases and can be helpful. Machine learning is a hot topic in data analytics, but it is best used when there is an abundance of data to train a model. It also has its limitations when there are too many variables.
Statistical methods are still very important in forecasting anomalies and trends based on data. They can use smaller amounts of data to determine outcomes. However, they are less adaptable because they can’t be used to train a model automatically like machine learning.
How to Use Predictive Analytics
Predictive analytics can help your business to identify opportunities for growth and improve your operations. There are many uses of predictive analytics across many industries, including:
In a healthcare setting, data is the key to better patient care. Healthcare providers can gain insights that can help improve patient outcomes and reduce costs by analyzing:
- patient demographics
- past medication history
- visits to the hospital
- lab test results
Predictive analytics is a powerful tool for healthcare practitioners, enabling them to identify and prioritize high-risk patients for certain conditions. This insight helps practitioners provide preventative care and intervene before problems become more serious.
Data is a critical component of machine maintenance and performance. Maintenance data logs maintained by technicians can provide valuable insights into the inner workings of older machines.
Meanwhile, newer machines are equipped with a variety of sensors that constantly monitor temperature, pressure, and other variables in real time. By using this data, technicians can ensure that machines are running at peak efficiency.
Data can be analyzed to predict potential machine breakdowns. Manufacturers can use this to plan ahead to proactively shut down machines for preventive maintenance. This helps reduce the chances of unexpected breakdowns, saving time, money, and resources.
Fraud detection systems can benefit from this tool. Predictive analytics can quickly detect any unusual behavior or potential fraud by gathering and analyzing data from numerous company customers. This helps companies save time and energy to better protect their resources.
For example, automation can track if a transaction is too large or is made from an unusual customer location. This will block a money transfer and ask the customer to confirm their identity and actions. This ensures that customers' funds are safe from fraudulent activities.
Software as a Service (SaaS)
Predictive analytics can be used as a tool for SaaS companies to identify and retain customers. It helps them to analyze customer data and identify patterns that could lead to customer churn. With the help of predictive analytics, they can analyze large amounts of data quickly and easily.
A predictive analytics algorithm will consider multiple variables:
- customer demographic
- past transaction history
- industry size
- company revenue
Based on this, automated communication like an email or SMS can be sent to the customer. The idea is to show customers how much value they can get from an application if they engage further.
Media and Entertainment
Predictive analytics can also be valuable in content production for entertainment and media companies. In gaming, predictive analytics can be used to decide the best ways to keep users engaged. This includes understanding the game experience and assessing the in-game behaviors of players.
Predictive analytics can also determine what can encourage in-game purchases would require considering:
player’s behavioral patterns that lead up to purchasing decisions
Working Backwards: Our Approach to Predictive Analytics
At Mactores, our approach to data and predictive analytics is to start from the end. We develop a proof of concept to determine if predictive analytics is for your business. Working backward is our philosophy when developing our data solutions. If we understand the end goal, we can create a roadmap of how to get there.
This means helping you to understand:
- how long it will take to reach that end goal
- how much of an investment it will be
- how long it will take to get there
- what steps it will take to get there
By leveraging predictive analytics, your business can gain valuable insights into your customers’ preferences and needs. With a small investment, we create a proof of value so that you can see if and how the existing data you have can really help your business.
We also offer a custom approach to data analytics and we know that one model won’t fit every customer. This is why we believe in creating proof of value to ensure we work with clients who can truly benefit from what we offer. We have to make sure you have a foundation that sets your business up for success.
Big data and predictive analytics aren’t tools to be afraid of or intimidated by. Data can offer real insights with actionable steps to help you improve your business.
Looking to automate your data platform? See how Mactores can help you today!