Data analysis

What if you could predict which of your customers are most likely to purchase again? Or who of your members will resign? And what if you could locate new clients or members who are similar to your existing best clients? You can do all of these things, and more, with data analytics.

Data analytics allows you to 'see the future' using your existing customer and sales data. The process involves creating statistical prediction models using available information about your customers and their past purchase or service histories. The model takes historic data and gives customers (or prospective customers in new markets) a certainty score for future actions. This score is the probability that the person will act in a certain way, and is based on their particular combination of predictor-characteristics.

Every category of customer information—e.g. their age, favorite colour, buying frequency or how many times a customer purchased in the past year—may be a variable in a complex model predicting future behavior.

Models can predict, with a high degree of certainty, which customers are most likely to, for example:

• Respond to a product or service offer;
• Defect to a competitor;
• Spend more (and if so, when and on what); and
• Make repeat or additional purchases.

With this knowledge, you can bring about desirable outcomes (e.g. more profitable sales) and prevent undesirable ones (e.g. customer attrition). You can better target communication, design product and service offers, and direct limited resources to customers with the highest potential.