Digital transformation is a competitive opportunity. Every minute, every day, we in today’s connected world are creating data.
Organizations now not only have access to big chunks of data internally, but also to user preference data caused by their actions on the internet. Moreover, over the years, data has become easier to store, and faster to process.
Given these advancements in technology, predictive analytics tools have progressed as a game changer.
What are predictive analytics tools?
Predictive analytics tools use various techniques like data mining, models, statistical algorithms, machine learning and artificial intelligence to identify and predict future outcomes based on historical and real time data.
Organizations are using these tools to solve various business problems and discover new opportunities.
Here are 10 ways predictive analytics tools will transform your business:
1) Boost Sales by Analyzing Historical Sales Data
Increasing sales growth rate always remains as one of the top focuses for any business.
Companies have huge volumes of historical sales data, however processing and analyzing this data for key insights and opportunities takes a lot of time for any sales team.
This is precisely where predictive analytics tools come in handy.These tools help businesses qualify opportunities for cross selling and up-selling based on past sales data.
With such identified opportunities, sales teams can effectively grow accounts faster and increase sales.
2) Identifying and Nurturing High Quality Leads
Predictive analytics can also be applied to lead scoring tools, giving businesses further insight into their prospects. This is a must have for sales teams in today's world. According to HubSpot, 38% of salespeople struggle most with prospecting (HubSpot, 2017).
Referencing the Pareto Rule - these tools use lead scoring techniques to help companies not only identify which leads are most likely to convert, but to identify which 20% of leads are most likely to convert in the shortest amount of time, so your sales team can spend more time and effort on nurturing and converting those specific leads.
Lastly, these tools also help sales teams figure out how to approach each prospect. It gives insight into what they're interested in and which channel they are most likely to respond to.
3) Customer Intelligence and Customer Lifetime Value
For companies, customer intelligence is vital. Predictive analytics can give simple insights into the purchasing behaviour of consumers, allowing companies to understand what their future course of action would be.
Such insights could be used to give custom offers to potentially high valued customers, ensuring further growth. By mapping consumer behaviour across various touch points, it gives companies a 360-degree view of their customers.
4) Improve Campaign Performance and Optimize Marketing Spend
"Where do I spend my marketing budget?"
The million-dollar question for all marketers. A campaign targeted to a specific audience last year during a specific season may have performed well, however a similar campaign this year might not give the same results.
Predictive analytics tools help companies target the right audience at the right time with the right products based on insights derived from previous campaigns with similar criteria. According to BrightTALK, 42% of B2B marketing professionals state that a lack of quality data is their biggest barrier to lead generation.
With such insights, companies can optimize their spend, targeting and timing for all marketing campaigns and improve overall campaign performance.
5) Demand Planning and Inventory Optimization
Globalization has made the supply chain more complex than ever before. Over stocking, losing out on sales, and improper forecasting of demand are common challenges faced by companies with respect to supply chain management.
Efficiency of the supply chain is based on the accuracy of its demand forecasting and supply planning. Predictive analytics tools identify overstocked and under stocked items and help companies implement a smarter inventory system. These tools analyze internal structured data as well as external data and forecast demand with greater accuracy. Predictive analytics tools with their more precise forecasting enable businesses to distribute the right inventory, to the right locations, at the right time.
They also help manufacturers source the right quantities of raw materials at the right time based on the forecasted demand. Effective supply chain and inventory management using predictive analytics tools helps in significant cost savings by reducing over stocking and improved sales by making supply meets demand.
6) Hiring Your Workforce
The right employees are an asset for any successful company. While hiring, companies are starting to look at the best cultural fit rather than hunting for the most experienced or most talented workforce.
By forecasting behaviour and helping organizations estimate who will meet their performance quotas, they're able to provide excellent customer service and spend budgets more efficiently.
With the advancements in data, the hiring process has become a set of well informed decisions, no longer relying on guesswork. The ability of use these tools to forecast who will succeed or who will fail is paramount to success.
7) Proactive Customer Service
Predictive analytics tools are enabling employees to deliver a personalized customer service experience. They have the power to prioritize which requests are critical and can escalate requests with ease. So, customer service agents can prioritize and handle important requests first.
Interestingly, these tools can provide proactive insights that customer service agents can leverage to rectify issues before they arise. This yields full personalization and effectiveness at scale.
8) Product and Service Innovation
New product developments or feature enhancements are usually based on customers’ wants and needs. Predictive analytics tools help companies distinguish these pain points faster, thus fuelling the innovation cycle.
By identifying these pain points, companies can build products to address those pain points while simultaneously improving the accuracy of forecasts about performance. In knowing the potential failure of new products, it enables organizations to reduce time to market.
9) Financial Decision Making
Predictive analytics tools help finance departments by identifying the lose drivers for the business, monitor cash flow including revenues and expenses, forecasting cash flow required and plan its future cash requirements to avoid liquidity crunch, enabling faster collection of overdue amounts by setting alerts when customers deviate from their past payment patterns.
10) Content Marketing Audit
Predictive analytics tools have become a major key for organizations as they have the potential to transform your business by giving key insights based on analysis of internal historical data as well as external data.
Every business now has access to huge volumes of data and insights. However only those organizations that can turn their data driven insights to decisions and actions can drive growth and gain competitive advantage.