Making a profit from big data Tweet This
With so much data available to companies these days, the challenge is how to “tame” it so that you have Business Intelligence that produces tangible benefits to the bottom line.
Predictive Analytics uses a variety of techniques to extract information from data to predict trends and behaviour patterns. These can then be modelled and applied to your business to make improvements to your profitability in a variety of ways: savings, efficiencies, better targeting, higher margins or increased revenues.
Let’s take a look at 5 of the financial benefits of Predictive Analytics:
Reduced risk. Risk has a cost and the more accurate and responsive to real time data your predictive analytics model, the lower the risk. You’ve probably seen in a film the NASA control room at Cape Kennedy with all those screens and computers monitoring every tiny detail of a rocket launch. With Evo Pricing’s powerful engine you have that kind of insight into customer behaviour and what’s happening in your market. Like NASA, we can even factor in the weather – who wants to launch a promotion (or a rocket) during a Force 9 gale? And automated assessments of impact enable rapid learning and ultimately leads to greater risk-taking.
Speed. Time is money, and when you can make quick decisions based on reliable data it allows you the flexibility to take advantage of even the smallest windows of opportunity. With monitoring of demand elasticity, every week you can discover how demand is changing and adjust accordingly.
New insights. Evo Pricing’s “secret sauce” is combining the wisdom of the staff with predictive analytics to create new insights. When a member of staff notices a possible opportunity it can quickly be tested to see if it is viable. This can be especially effective with niche, long-tail products. For example, one of our clients’ stores that had never previously stocked swimwear now finds it to be one of their best-performing products. All because of a suggestion from one of their employees.
Greater profits. Or bigger margins on fewer products. With the massive amount of data you have to hand, you have the opportunity to fine-tune your pricing based on the KPIs of your choice. You know which products are profitable at which price points and can optimize stock allocation to avoid losing potential sales.
Organisation alignment. With different departments of a company having diverse goals and responsibilities this can lead to poor communication between demand management and supply management. Predictive analytics can bring all the pieces of the jigsaw together with a holistic overview that helps manage the fragile balance between stock-outs and inventory costs.
This is not an exhaustive list. The longer we work with a client, the more we can explore together areas of their business where predictive analytics can have a positive impact. If you have the data, we have the tools to make it sing.
Contact us now and let’s start getting your data in tune with your business.
About the author
Martin Luxton is a writer and content strategist who specializes in explaining how technology affects business and everyday life.
Big Data and Predictive Analytics are here to stay and we have only just begun tapping into their enormous potential.