The real trend this year is not the technology, its the application of Business and Predictive Analytics to real business issues and opportunities. It’s about helping business people make better decisions and actually change the way companies do business.
Predictive and Business Analytics has always been about transforming business.
Companies are now investing heavily in analytics.
• Analytics is the #1 top technology priority for both CIO’s and CFO’s according to Gartner.
• Nucleus research recently released a report showing that organizations get $10.66 of value for every $1 invested in predictive analytics
Instead of Analytics being something that is used to monitor and eventually improve a business process, analytics is becoming a more fundamental part of the business process itself.
In the Aberdeen recent report authored by Aberdeen Analysts Trip Kucera and David White, titled “Divide and Conquer: Using Preditive Analytics to Segment, Target and Optimize Marketing”, they assessed the responses from hundreds of companies that have adopted Predictive Analytics for their marketing departments. The results of their survey are:
Comparing the top 35 percent of enterprises in the report with the remaining 65 percent – based on success of implementation and ROI – the top “leaders” scored a more than five-times advantage in year-over-year change in lifetime customer value than other enterprises in the report. Predictive analytics also enabled leaders to rank response times to customer queries at nearly double the rate of their counterparts, and an average percentage opt-out rate that was cut by 1.3 percent, according to the report.
There was also a difference in customization of marketing efforts from predictive analytics. Fifty-five percent of leader enterprises were able to offer customized offers to clients, compared with 33 percent of other enterprises using predictive analytics. And those leaders were able to apply behavior scoring to customer data at a higher rate (49 percent) than those less adept at predictive analytics (38 percent).
Aberdeen found that many of the tools and applications surrounding predictive analytics were the same among all enterprises surveyed. However, there was a stark contrast in organizational support and mandates to act on predictive data. With leaders, business managers were mandated to act on predictive information 45 percent of the time, but that was only the case with 30 percent of the remaining enterprises. In a different survey section, 45 percent of leaders were able to execute on predicted outcomes, though 28 percent of other organizations had that same directive and capability.
“When predictive analytics is used to support customer retention strategy, changes to operational processes will often be needed,” Kucera and White wrote in the report. “Changing a process changes the roles, responsibilities and reporting structure of the people involved in that process. That can be a challenge for some organizations.”
We recently produced a paper titled “Why some companies succeed with their Retention Programs and why some don’t” Please get your copy today.
Bottom line is; to be successful with Predictive Analytics companies need to transform themselves, roles, responsibilities and reporting structure and align to the insights derived from the analytics.
C Suite support is also critical to any implementation of Predictive Analytics.s applying Business and Predictive Analytics.