Many companies use analytics to monitor things like website traffic and conversions, as well as customer demographics and sales numbers. But these basic functions can only do so much. Predictive analytics goes beyond looking at what happened at the past, providing insight into what could happen in the future and how likely it is to occur. Using these tools can both reduce expenses and increase revenue. There are many ways to take advantage of them and improve the sales process from end to end.
Optimize Inventory Levels
Finding the right balance of inventory is a constant challenge. It is important not to lose customers to a shortage of stock, but holding too much inventory at any given time becomes expensive. It is no longer enough to simply track current inventory levels and restock when they are low. While this method can avoid the worst shortages, it ignores many nuances of retail and the overall environment.
Predictive analytics takes many internal and external factors into account. What are inventory levels normally like at this time of year? What events might affect demand (such as weather or a major sporting event)? How will the popularity of one item affect the performance of another? What is the optimal quantity for each size and color? With sufficient data, it is possible to more accurately estimate the best inventory levels, minimizing the chances of running out of stock or being stuck with items that no one wants to buy.
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Identify and Maximize the Target Market
A company’s ideas of its target market and the customers with whom it actually has the most success are not necessarily the same. Sometimes interest can come from unexpected areas, and sometimes the demographic that seemed perfect for a product actually turns out not to be very profitable. Analytics can identify these patterns, allowing the business to adjust its marketing or even its product mix to better suit its customers.
Target Sales Efforts More Precisely
Sending untargeted marketing materials can be a waste of resources, and even push away some customers. Predictive analytics can identify what a particular customer is most likely to be interested in and when, allowing marketing to send timely promotions that are relevant to their needs and interests. This leads to fewer promotional messages being sent, while increasing the effectiveness of those that are. In addition, predictive analytics allows the company to improve results without increasing spending.
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Proactively Engage Customers
Predictive analytics can help identify customers that are in the early stages of the purchasing process, allowing the company to open a conversation and engage them before competitors have a chance to act. These predictive analytics tools also make it possible to guess when existing customers will want to make new purchases, providing an opportunity to target them with promotions, or signaling that the seller should increase its inventory levels in anticipation of the purchase. This makes the buying process smoother for the customer and encourages loyalty.
These are just a few of the many ways that predictive selling can improve customer satisfaction and increase profits. The efficiencies, savings, and opportunities that sales analytics solutions provide make them well worth the investment.