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Predictive Analytics basic

What is predictive analytics? How does it differ from historical analytics?

Predictive analytics looks at what has happened to date, and applies statistical models to reliably forecast what will happen next. It sounds a little bit like magic, but it’s actually just math. Predictive analytics lets you infer what a person (customer, patient, citizen, employee, etc.) will do in the future based on the information you have about that entire population and what that individual has done before. You can then group people together based on these individual predictions to project what those segments of the population will do in the future.

In comparison, historical analytics focuses on what has happened previously. It lets you track results over time and determine meaningful trends. Historical analytics uses reports, charts, graphs, and other types of data visualizations to make information as accessible as possible. A business can then see which methods have brought the greatest success over time, and then further invest in the most effective methods going forward.

Download the Predictive Analytics Worksheet

You can try out your own simple Recency / Frequency / Monetary (RFM) Analysis with our RFM Spend Calculator worksheet.

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