Often referred to as data mining, predictive analytics differs from traditional business analysis, in which the user must have some idea of what they are looking for.
Predictive analytics is data-driven, rather than user-driven, so it can discover rules or relationships in the data that can’t be found via traditional means.
It can answer such questions as:
- What are the characteristics of my high-value customers?
- How can I detect opportunities for cross-selling and up-selling?
- Which of my customers are likely to leave?
- What’s the right insurance quote for this customer?
- When one part fails, what other parts may fail soon?
- What’s the likelihood of a part failure?
- Are there data patterns that are an indicator of fraud?