The Four Types of Data Analytics to Know

Most businesses understand the importance of data analytics. However, they may be finding that it is not proving to be as effective as they want it to be. If this is happening to you, consider whether it is because you are treating data analytics as a ‘one size fits all’, when in fact there are different types of data analytics. To get the best results, you need to understand them all.

Descriptive Analytics

Descriptive analytics looks at what is or has been happening. To make the most of descriptive analysis, you need to consider the areas of interest that you want to explore in the data set, gather and clean the relevant data, and use statistical techniques for summaries.

Areas that can be useful include financial reporting, supply chain management, and customer relations. If this sounds difficult, consider using the services of a data collection company like shepper.com which will be able to help you with any aspect of data analytics.

Predictive Analytics

Predictive analytics uses historical data to work out what may happen next, such as opportunities for growth or identifying risks. Areas where this can be helpful include credit scoring, inventory management, and sales forecasting.

Prescriptive Analytics

Prescriptive analytics looks at what you should do, using the data to decide the best course of action. This can use machine learning, recommendation engines, neural networks, and mathematical algorithms to provide guidance on what to do next. It can be used to identify skills gaps in the workforce to inform employee training and to optimise marketing campaigns.

Diagnostic Analytics

Diagnostic analytics looks at why something happened. It analyses historical data patterns to understand why a problem occurred. By using advanced statistics and looking at the relationship between variables, it can improve the understanding of a particular problem.

An area it can help with is customer retention, as it can look at the reasons for customers leaving. It can also examine website traffic, identifying why there has been a drop-off, with the aim of resolving the issue so it does not continue to cause problems.