Josh: Hello and welcome to the WNS business insights podcast series. This podcast series brings you the latest trends and concepts in your industry and in the field of outsourcing so that you can make your outsourcing programs even more successful. My name is Josh Passman and I ll be your host for your podcast with Amitabh Bose, or Ambo as he is popularly called, a senior vice president at WNS, a leading global business process outsourcing company. Today we ll discuss with Ambo, the concept of predictive analytics which is clearly emerging as the Mecca for marketers. Hello Ambo and welcome to the WNS business insights podcast series.
Ambo: Hi Josh. Good morning and very happy to be talking to you this morning.
Josh: Same here. So, Ambo, can you help explain to the listeners of this podcast what we mean when we talk about Predictive analytics?
Ambo: Josh, you recall the movie,Minority Report?
Ambo: Well, the backbone of that movie is pretty much predictive analytics which is essentially determining an event before it has occurred. In the movie, its about crime, but in real life people are predicting how consumers are going to behave in the future. Thats a part of predictive analytics.
Josh: That sounds very interesting. Being able to actually predict what customers are likely to do and alter marketing strategies accordingly. How are companies actually doing this?
Ambo: Many companies are; even more so in these times. Broadly the applications are in enhancing revenue, optimizing cost or managing risks. To share my experiences with you today, we have CPG clients who are using marketing mix modeling to drive sales as high as 30 per cent, but without increasing a dime in their media spends. In the leisure and holiday business, people are using attrition modeling that helps them target up to 75 per cent of their attritors by only looking at say 30 per cent of their member base. In consumer banking, there is risk modeling which can help you profile a new credit card applicant, or you could look at lets say in the business to business space where you could be looking at the likelihood of purchasing new products among top customers and then focus your sales team in right selling. Josh, you can see that there are wide varieties of applications to predictive analytics and clients are actually drawing real tangible benefits out of this.
Josh: Is predictive analytics meant only for large companies or can small and medium size companies use it as well?
Ambo: Anyone who has the data or has access to data can do it. Today there are various data suppliers who can give you the data at a cost. I would say predictive analytics today is not a factor of large or small companies but basically, smart guys do it.
Josh: Now arent there various techniques to predictive analytics? How do I, as a marketer, decide which technique to use?
Ambo: Well there are various techniques - all sorts of regression modeling techniques like multiple regression, survival analytics, logistics regression are various techniques of predictive analytics. There are decision tree techniques like CHAID and CART, time series analysis, neural networks; the list is endless. The important thing to know is what kind of business questions you have and what kind of data sets can you procure or have access to.
Josh: Finally Ambo, for marketers looking to leverage predictive analytics, what would be two to three recommendations that you could offer?
Ambo: Josh, I think that the priorities in these times are both in terms of driving operating efficiency and also revenue enhancement. Now companies have a ton of data available, you know, (like) everyday transactional data sets. My one and only recommendation would be to use a strong analytics engine that crunches this data to answer those business questions. And yes, that is possible using predictive analytics. And the answer needn't necessarily be in doing it in-house. There are outsourced partners that you may engage in doing this. In fact, there are a lot of companies that are actually doing that.
Josh: Well, thank you Ambo for helping us better understand how marketers are leveraging predictive analytics to increase their revenues especially in this current economic climate, tools that can help drive sales and boost efficiency are in strong demand. This creates a great opportunity for broader adoption of predictive analytics by marketers today and going forward. For more information on research and analytics, and other business insights on how you can improve your business performance, please visit us at www.wns.com.