Predictive analytics is a source of fresh insight based on finding patterns in the tidal wave of transactional data that is stored and aggregated in existing transactional and data warehousing systems. In its predictive form, an inference about future behavior, performance or events is an essential part of the analytic model - the prediction is inside the model, not merely posed by the inquirer in a database query. Major drivers include:
The need to get to know the customer as a system of dispositions and behaviors. Firms need to relate to the customer as more than a series of clicks on a Web page or an aggregation of transactions. The view of the customer is transformed by predictive analytics. The customer is a bundle of dispositions and propensities - to buy, to jump to the competition or to be loyal. As the economy turns from cost cutting to generating incremental revenue, predictive analytics is an important method of producing results because it is able to determine a future outcome of customer, product and market behavior with a determinate, scientific probability.
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