In a study by Gartner, they reported that "business intelligence and analytics [have] been cited as the number 1 priority for CIOs for the past three years running." In fact, it is projected that 35% of all organizations will have a prescriptive analytics solution by 2020. With these two industries projected to grow exponentially in the near future, it can be surprising that many sales team don't fully understand the difference between the two and why they are both important.
Predictive analytics is the science of running data through algorithms to detect historical patterns and be able to predict unknown future outcomes. As the technological world continues to ride the wave of 'big data', many seek to utilize the data collected on consumer behavior and business trends to be more agile and efficient in their operations. A McKinsey research report found that "even among fast-growing companies, only just over half—53 percent—claim to be moderately or extremely effective in using analytics to make decisions." Predictive analytics empowers sales teams to use their data more effectively and to avoid repeating ineffective sales strategies. As a sales manager, a predictive analytics solution can help you set quotas for your sales reps or teams, build a forecast, develop playbooks against specific competitors, and reallocate resources to identify and target your best potential buyers.
Prescriptive analytics is the new golden child of business intelligence solutions. Similarly to how predictive analytics advanced the capabilities of big data solutions, prescriptive analytics seeks to do the same to predictive analytics. Prescriptive analytics takes predictive analytics to the next level by not just analyzing data but also offering actionable feedback to help improve a future outcome. For the sales team, this means having a real-time personal sales coach that can help keep deals from stalling or can tell you of potential pitfalls with a particular deal ahead of time. As a sales manager, prescriptive analytics tools can not just give you real-time updates on your pipeline but also tells you what to do if you're getting late in your sales period and are not projecting to make your number.
While predictive and prescriptive analytics tools are both powerful tools, they are still quite different and uniquely important. The best sales technology stack includes a prescriptive analytics solution that you can trust to know your sales team's behaviors and provide the best advice to properly coach sales reps. However, diving head on into trusting a new technology can be daunting. Since 19% of organizations don't use analytics at all within sales forecasting, predictive analytics is a solution that every sales manager should be looking to implement within their sales organization. Predictive analytics is enough to empower you as a sales leader to have a great understanding of what your data says about your sales organization. From there, you can confidently strategize on how to improve performance across the board.
If you think the distinction between predictive and prescriptive analytics tools is still murky, or you want to see both of these capabilities in action, contact us! We are happy to give you a first-hand look at what these solutions can do for your sales team and how they can save you time and increase your revenue.