{"id":2250,"date":"2020-02-11T02:31:18","date_gmt":"2020-02-11T02:31:18","guid":{"rendered":"http:\/\/kusuaks7\/?p=1855"},"modified":"2024-01-11T18:20:40","modified_gmt":"2024-01-11T18:20:40","slug":"why-the-future-of-data-analytics-is-prescriptive-analytics","status":"publish","type":"post","link":"https:\/\/www.experfy.com\/blog\/bigdata-cloud\/why-the-future-of-data-analytics-is-prescriptive-analytics\/","title":{"rendered":"Why The Future Of Data Analytics Is Prescriptive Analytics"},"content":{"rendered":"\t\t
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\n\t\t\t\t\t\t\t\t\tAnalytics is probably\u00a0the\u00a0<\/em>most important tool a company has today to gain customer insights. This is why the\u00a0Big Data space is set to reach over $273 Billion<\/a>\u00a0by 2023 and companies like Microsoft, Amazon and Google among so many others are so heavily invested in not only collecting data, but enabling data for the enterprise.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tAs AI and machine learning continue to develop, the way we use analytics also continues to grow and change. While in the past, businesses focused on harvesting descriptive data about their customers and products, more and more, they\u2019re about pulling both predictive and prescriptive learnings from the information they gather. So\u2014what is the difference between descriptive, predictive analytics and prescriptive analytics? And do you need the latter in your company?\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tIf you\u2019re new to the data analytics field, let\u2019s do a quick overview:\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\t\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0Descriptive analytics:<\/strong>\u00a0data that provides information about what has happened in your company. Think about a monthly sales report, web hit numbers, marketing campaign rates, etc. They give you insights on how a project performed. This is the most basic form of analytics. (Think \u201canalysis\u201d vs. \u201canalytics<\/a>.\u201d)\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\t\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0Predictive analytics:<\/strong>\u00a0data that provides information about what\u00a0will<\/em>\u00a0happen in your company. Pulling on more complex machine learning and AI processes and algorithms, predictive analytics help you determine what will happen\u2014how well a product will sell, who is likely to buy it, which marketing to use for the greatest impact.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\t\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0Prescriptive analytics:<\/strong>\u00a0data that provides information on not just what will happen in your company, but\u00a0how it could happen better<\/em>\u00a0if you did x, y, or z. Beyond providing information, prescriptive analytics goes even one step further to recommend actions you should take to optimize a process, campaign, or service to the highest degree.\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tTo best honest, there is still a lot of confusion between what constitutes predictive and prescriptive analytics, and you may see them used interchangeably in some circles. Regardless,\u00a0descriptive, predictive, and prescriptive analytics<\/a>\u00a0all play important roles in our organizations today. We don\u2019t always need complex algorithms running on our data. Sometimes we just want to know where our financials stand or how much traffic our social media pages are getting. However, in those instances where we do want to improve efficiencies and optimize performance, prescriptive analytics are playing an increasingly important role.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Prescriptive Analytics Makes Marketing Easier<\/strong><\/h3><\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tLet\u2019s take a for instance. In the past, marketing teams would draft campaigns and use descriptive analytics to target who they felt would be most open to receiving it. Customers in the 20-30 range might get a \u201cyounger\u201d message than those in the 45-60 age range. They might be pitched different products or services. This would generally lead to better overall performance of the campaign. And honestly: many companies still market this way. But this type of marketing still isn\u2019t optimally efficient. There are still many assumptions going into it, and even the results\u2014a high or low purchase rate\u2014won\u2019t necessarily provide insights on why the campaign did or didn\u2019t perform well.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tWhen we move into predictive analytics, things get a bit clearer. AI and machine learning can tell us more specifically which groups of customers to target, and which products or discounts to offer to maximize impact. They can even tell you what time of day and what medium to use to reach them. But the results of those campaigns are still descriptive. They won\u2019t tell you what you should be doing to improve your results even further.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\t\nEnter, prescriptive analytics. Prescriptive analytics takes three main forms\u2014guided marketing, guided selling and guided pricing<\/a>. It uses AI and machine learning to guide buyers with less human interaction\u2014prescribing the right buyer, at the right time, with the right content\u2014telling sales people which product to offer using what words\u2014informing you what price to use at what time in which situation. This information allows you to maximize not just sales but price and profit overall.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tIndeed, the benefits of predictive and prescriptive analytics go far beyond sales conversions. They bleed down into time savings, efficiencies, human capital, transaction costs. Predictive analytic, when automated, can allow you to make real-time decisions\u2014something gasoline and\u00a0chemical companies<\/a>\u00a0do, for instance, changing prices throughout the day to maximize profit. Achieving the benefits of data and more specifically prescriptive analytics comes down to having the technology, systems and processes to maximize available data. In\u00a0one of my recent pieces<\/a>, I spoke a lot about the importance of having the right infrastructure and software to power your data. Those thoughts remain true here if you want to move up the food chain to leverage the power of prescriptive analytics. This is because prescriptive analytics are about trusting that the AI will do the work to maximize sales on your behalf, based on the calculations it\u2019s performing in the background (which is driven by your systems of record, tools and infrastructure). It also requires relinquishing control. But the data it creates from these exchanges is also incredibly insightful, proving that often AI can optimize sales and marketing like humans never could.\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tTo know which type of analytics your company should be investing in, you need to start with the big question:\u00a0what do you want to accomplish<\/a>? As I noted above, prescriptive analytics are powerful, but they won\u2019t be necessary for every company, or every campaign you push out to customers. They also will require a lot of tweaking. No algorithm was crafted perfectly the first time. It takes time, effort, and focus to make prescriptive analytics work effectively. But if you are in a competitive marketplace\u2014managing anything from products to people\u2014prescriptive analytics could mean a huge boost to profit, productivity, and the bottom line. And honestly: it\u2019s still early in the prescriptive analytics game. I\u2019m guessing we\u2019re only seeing the tip of the iceberg in terms of what prescriptive analytics can accomplish. (And for small and medium-sized businesses out there, don\u2019t worry: My guess is Prescriptive Analytics as a Service isn\u2019t far behind.)\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

Prescriptive analytics are powerful, but they won’t be necessary for every company, or every campaign you push out to customers. They also will require a lot of tweaking. No algorithm was crafted perfectly the first time. It takes time, effort, and focus to make prescriptive analytics work effectively. But if you are in a competitive marketplace—managing anything from products to people—prescriptive analytics could mean a huge boost to profit, productivity, and the bottom line. And honestly: it’s still early in the prescriptive analytics game.<\/p>\n","protected":false},"author":607,"featured_media":3640,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[187],"tags":[94],"ppma_author":[3224],"class_list":["post-2250","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bigdata-cloud","tag-data-science"],"authors":[{"term_id":3224,"user_id":607,"is_guest":0,"slug":"daniel-newman","display_name":"Daniel Newman","avatar_url":"https:\/\/www.experfy.com\/blog\/wp-content\/uploads\/2020\/04\/medium_7789c161-9099-44fa-ab1a-1a09d25b81d7-150x150.jpg","user_url":"https:\/\/futurumresearch.com\/%20","last_name":"Newman","first_name":"Daniel","job_title":"","description":"Daniel Newman is Founder, partner and operator of 4 companies. He is Principal Analyst at Futurum Research, CEO at Broadsuite Media Group and President at Digital Agency V3B. He is also an author and contributor to some of the world\u2019s largest media outlets. A regular on Forbes, Entrepreneur and The Huffington Post, as well as the author of 5 Amazon Best Selling Books, he is also an Adjunct Professor of Management at North Central College."}],"_links":{"self":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts\/2250","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/users\/607"}],"replies":[{"embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/comments?post=2250"}],"version-history":[{"count":4,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts\/2250\/revisions"}],"predecessor-version":[{"id":35485,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/posts\/2250\/revisions\/35485"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/media\/3640"}],"wp:attachment":[{"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/media?parent=2250"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/categories?post=2250"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/tags?post=2250"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.experfy.com\/blog\/wp-json\/wp\/v2\/ppma_author?post=2250"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}