Four Types of Business Data Analytics to Know : Palin Analytics
When we implement Data science the word used for it is Analytics.
There are 4 types of Analytics:
- Exploratory Analytics – exploring the data to gain understanding.
- Diagnostic Analytics – understanding the root cause of a problem.
- Predictive Analytics – making intelligent predictions about the future.
- Prescriptive Analytics – designing an action plan to eliminate
Though the above 4 are self-explanatory let us elaborate.
1. Exploratory Analytics is about exploring various possibilities from available data to see how effectively the available data can be put to use. For example, you are having a store in a Mall and you are visited by different types of Customers. There could be some who have less income and spend very little in your store, you could categorize them as “careful customers” whereas there are some customers who have less incomes but spend wholeheartedly, you could categorize them as “reckless customers”. Or you could have customers with large income levels and spend wholeheartedly. This kind could be labeled as your “Prime customers”.
In case you are launching an expensive product in your store, you would definitely want to target your “Prime Customers” as they are more likely to buy these products, so that would be called as making a strategy to attract your “target audience”
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The concept of advertising is witnessing a sea change from the conventional methods used. Instead of spending huge amounts on conventional marketing ideas, the concept of reference advertising and Cashback are emerging as innovative methods to achieve success. They play on consumer psychology, by giving them a “feel good” factor, they are making the consumer promote their product by asking their friends to download the app. A win-win situation is created whereby the precise audience is targeted and best results achieved. This is known as exploring possibilities or Exploratory Analytics. A major amount of time and effort is devoted to exploratory analytics by any business entity.
2. Diagnostic Analytics is about diagnosing the root cause of a problem. Steps are needed to solve the problem. for example, how do you increase the profitability of your business? You feel that there are n number of factors involved in solving the problem and you diagnose which factor could help you achieve your goal, so remedial measures are taken which is also known as
3.Prescriptive Analytics a continuation of Diagnostic Analytics. Just as a Doctor is able to prescribe medicine to his patient after diagnosing his symptoms so also we are able to provide prescriptive analytics after diagnosing the actual cause of a problem.
4. Predictive Analytics follows a study of previous patterns of consumer behavior and predicts the pattern which will emerge from these findings.
Three skill sets that a Data Analyst or Data Scientist should possess are:
- Maths and Statistics
- Programming tools or skills
- Domain knowledge.
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