predictive analytics webinar...4. how to build predictive models • hypothesis testing using...
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PREDICTIVE ANALYTICS
DEMYSTIFIED
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Agenda
• Introduction• What is Predictive Analytics?• Who needs Predictive Analytics?• How to build Predictive Models?• Demonstration: IBM SPSS
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• Demonstration: IBM SPSS• Questions and Answers
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1. Introduction
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1. Introduction
• Would you like to increase your customer retention?
• Would you like to increase your sales and acquisitions?
• Would you like to increase your direct
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• Would you like to increase your direct marketing response?
• Would you like to decrease your campaign spending?
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Analytics Quotient
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Analytics Quotient
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2. What is Predictive Analytics?
Better predict customer
• Empirically-derived models used for predicting future outcomes
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customer behavior, increasing profits and revenue
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2.1 Goals of Predictive Analytics
• Bring key business insights into our decision-making processes
• Solution to our biggest challenges with data mining• Integration of predictive analytics with data driven
decision making
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decision making• Positive ROI and superior outcomes
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2.1 Goals of Predictive Analytics
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2.1 Goals of Predictive Analytics
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3. Who needs Predictive Analytics?
• Companies that need to:
1. secure their competitiveness2. increase sales and grow customer base3. manage fraud
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3. manage fraud4. meet customer’s expectations5. improve core business capacity
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4. How to build Predictive Models
• Hypothesis testing using econometrics and predictive analytics1. Assumptions validation and defining hypothesis2. Data description and data collection3. Data exploration with easy-to- access procedures and
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algorithms4. Identification of key factors for analysis5. Predictions and forecasting using linear and non-linear
regression models6. Presentation of the results using charts and graphs
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5. Demonstration: IBM SPSS
• Analyze: Cognos Workspace• Forecast: SPSS Statistics• Mine, Model, Predict: SPSS Modeler• Plan: Cognos TM1• Visualize & Decide: Cognos Insight and SPSS
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• Visualize & Decide: Cognos Insight and SPSS Decision Management
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Data on Airlines in SFO
• Collected monthly via customer interviews held at all airport terminals and boarding areas from July 2005 through March 2011
• Interviews were done using a stratified random sample of flights selected by airport staff
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sample of flights selected by airport staff• The questionnaires were available in English,
Japanese, Chinese, and Spanish.
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SPSS Modeller
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Airlines in SFO – Bar Chart
• Passengers by Origin or Destination
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Airlines in SFO – Pie Chart
• Passengers by Airlines
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Airlines in SFO - Crosstab
• Cross Tabulation of Destinations and Incomes
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• Q21_Income Group column: 1=Under 50,000, 2=$50,000 - $100,000, 3=$100,001 - $150,000, 4=Over $150,000, 5=Over $500,000
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Airlines in SFO – Crosstab (cont.)
• It is obvious that Airlines should provide First Class and Business Class on the top 8 routes
• On the remaining routes it is not necessary
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it is not necessary
• Q21_Income Group column: 1=Under 50,000, 2=$50,000 - $100,000, 3=$100,001 - $150,000, 4=Over $150,000, 5=Over $500,000
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Conclusion
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Conclusion
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22
Thank You !
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