Title: Predictive Analytics Author: Kriko Published: May 23, 2023 Last modified: Jul 7, 2026 --- 1. [Home](https://kriko.io/) / 2. [Glossary](https://kriko.io/glossary) / 3. P Letter # Predictive Analytics **Predictive analytics** is an analytical approach used to estimate future events, behaviours and outcomes. It applies patterns identified in historical and current data to generate forecasts or probabilities. A model may estimate the likelihood of a particular event or predict a future numerical value. However, the results represent probabilities based on the available data and model rather than guaranteed outcomes. Predictive analytics may be used in big data projects, but it is not limited to large datasets. It can also be applied to smaller datasets when sufficient and reliable information is available. Regression, classification, time-series analysis, data mining and machine learning are among the methods used in this process. The appropriate technique depends on the target outcome and the structure of the available data. The process begins by defining the business problem and the result that needs to be predicted. Relevant information is then collected, cleaned and prepared for modelling. Models are trained on historical data and tested against information that was not used during training. Their accuracy, error rates and suitability for the business objective are evaluated before they are introduced into operational use. Predictive analytics can be applied in marketing, finance, manufacturing, logistics and customer management. Organisations may estimate whether customers are likely to respond to a campaign or discontinue a service. Supply chain teams can assess sudden changes in demand, inventory requirements and delivery delay risks. Financial institutions may develop models for credit risk, fraud probability and payment behaviour. In marketing, predicting **customer behaviour** can help organisations direct campaigns towards more relevant audiences. Previous purchases, engagement information and customer characteristics may be analysed to identify groups that are more likely to respond to an offer. Personalised campaigns and customer retention programmes can then be developed. The results should nevertheless be evaluated with consideration for privacy, data quality and potential model bias. Airlines, hotels and restaurants may use predictive analytics for demand forecasting and capacity planning. Historical reservations, seasonality, occupancy rates and event calendars can support estimates of future demand. These forecasts may inform pricing, workforce planning, inventory management and campaign decisions. A properly developed **predictive model** can help organisations identify risks earlier and prepare more effectively for emerging opportunities. ## Discover it in the dictionary ### Internet of Things The Internet of Things, commonly abbreviated as IoT, is a technology approach that enables physical objects equipped with sensors, software, processors and communication capabilities… ### Concurrency Concurrency is a computing approach in which the progress of multiple tasks is managed within the same period. These tasks do not necessarily have… ### Customer Churn Analysis Customer churn analysis is an analytical method used to identify the reasons behind customer losses and predict which customers may leave in the future.… ### A Virtual Private Cloud A Virtual Private Cloud, commonly abbreviated as VPC, is a cloud computing model that provides an isolated and customisable virtual network within a public… ### Feedback Feedback is an evaluation, comment or report that a user provides to a system, platform, brand or search engine about an action they have… ### Financial Analytics Financial analytics is an analytical discipline used to evaluate the overall economic and financial performance of an organisation or brand. It involves assessing a… ### Business Continuity Plan A Business Continuity Plan, commonly abbreviated as BCP, is a preparedness and response plan that defines how an organisation will maintain critical operations during… ### Target Market Target market refers to the specific market segment with commercial potential to which a company plans to offer its products or services. This segment… ### Indexing Indexing is the process by which search engines add crawled and evaluated web pages to their own index. For a page to appear in… ## Track the digital heartbeat with Kriko Subscribe to receive curated insights, news, and ideas shaping the digital landscape. By checking this box, you acknowledge and accept our [privacy policy](https://kriko.io/privacy-policy).