TECHNOLOGY FOR CHANGE

Smart Companies Improve Customer Service with Predictive Analytics

Salvatore Salamone | Date: 04-26-11 | Comments

To address the more dynamic nature of doing business today, smart companies increasingly are turning to predictive analytics to spot market changes and identify potential problems and correct them before they impact the customer.

For years, businesses have used historical trends to dictate how they operate. Most use business intelligence to study customer trends and match their services to these patterns.

But today�s marketplace is much more dynamic than it has ever been.

To address the more dynamic nature of doing business today, smart companies increasingly are turning to predictive analytics to spot market changes and identify potential problems and correct them before they impact the customer.

Basically, predictive analytics helps organizations look forward, and make educated decisions that anticipate customers� future needs. It combines known information about customers, sales or finances, with critical insight to solve problems, achieve business objectives, uncover hidden patterns in customer behavior, and then use the combined knowledge to take actions that can improve business.

Put another way, business-intelligence tools have told companies what has happened based on historical trends. Predictive analytics tools can give deeper insight into why things happened.

To get the most from predictive analytics, companies are incorporating more real-time data into their analyses. Today, it is quite common to mine news feeds for changing business conditions and social-media sites to better understand customer likes and problems. Rolling this information into a decision-making process can help deliver better customer service.

Because predictive analytics can increase customer satisfaction and improve customer service, businesses are rapidly embracing it. An IBM Institute for Business Value study found that while 28 percent of companies surveyed were currently using predictive analytics, an additional 41 percent said they planned to in the next two oyears.

In other words, smart companies will need to embrace predictive if they are to remain competitive.