Analyzing a large volume of data for any company, regardless of its scale, is already an essential part of the decision-making process. Big data is used to solve routine issues, such as enhancing the conversion rate or increasing customer loyalty to an e-commerce company. But do you know you can use it before they happen to forecast circumstances as well? This is the added benefit of Predictive Analysis in Sales, the use of big data to predict consumer behavior based on historical data, and to improve sales accordingly.
Periodically conducting Predictive Analysis in Sales is associated with enhancing the perception of the consumer and predicting market trends before they happen. To recognize threats and opportunities, the predictive models extract trends from historical and transactional data. Self-learning apps can evaluate the data at hand automatically and have solutions for future problems. This will allow you to develop new selling strategies to respond to changes and increasing income.
Predictive Analysis in Sales helps users to
Foresee Market Trends
Based on data from past periods, predictive analytics can determine the maximum and minimum demand points that the organization may encounter over the year. This helps e-commerce companies to respond before their competition by planning a successful campaign to acquire customers and have enough stock on hand to satisfy demand. They may also develop an elaborate pricing plan for revenue optimization.
In the same way, dynamic pricing is based on predictive analytics to tailor prices to consumer needs. Using software such as Minderest’s predictive pricing tool, more than 20 different KPIs can be automatically evaluated to assess the best prices for your products and services, taking historical data and the outcomes of previous decisions into consideration.
Design Personalized Offers
Predictive analytics allow predicting which offers will be most successful, according to each client’s specific characteristics. With proper segmentation, for each consumer community, you can expect potential actions and attitudes based on how they behaved in the past and sell them only certain items that are of interest to them. The key to doing this can be found in reviewing the details on what each customer has ordered, how much they have spent, their location, the channel used, and other key performance measures.
Optimize Revenue Resources
Companies can also predict the actions of the customers in the sales process employing predictive analytics. It is possible to indicate that there is a possibility that they will break their contractual partnership with the e-commerce company as well as whether they will be open to making any new purchases. In short, one can classify the most valuable customers, the ones that the business should pay more attention to.
Despite its many advantages, CEOs and marketing managers should keep in mind that predictive analytics cannot always explain changes in customer’s or competitors’ behavior, as it is based on historical data. If a new component that shifts market dynamics comes into play, such as the advent of new virtual assistants to buy like Alexa, this tool won’t be able to predict it.
Analyzing the Approach of the Market
Besides knowing the situation in the market, it is essential to be aware of the tactics that the competition is using. In this context, one central aspect is tracking each competitor’s prices and promotions to assess its profit margin and forecast the acts they will take in the coming months. It is another offshoot of predictive analytics that helps an e-commerce company to bring its direct rivals upfront.
It is possible to identify any price changes from other companies in the sector, whether they are short- or long-term shifts or intermittent promotions, through retailer price monitoring software. As a result, one can classify their campaigns, promotions, and the timeframe in which they are being performed.
The use of big data as a differentiating factor in decision-making as a whole is a strategic advantage for certain businesses that aim to maximize their sales and revenues.