Making It Easier To Predict The Future

Companies are always looking for a unique competitive advantage, and some have turned to technologies that can help them predict the future. Increasingly sophisticated predictive-analysis software is helping businesses determine which of their customers are most likely to respond to a sales pitch, switch to a competitor, or prove to be unprofitable through nonpayments and defaults.

Predictive-analysis tools use data mining to build models that examine historical data, such as a consumer's purchases, and use that information to predict future behavior. Such insight can help companies improve sales and marketing efforts. Fair Isaac, Genalytics, IBM, Oracle, SAS Institute, and SPSS are some of the suppliers of the software.

This week, SPSS will begin offering SPSS PredictiveMarketing 2.0, which incorporates predictive-analysis technology the company acquired when it bought Data-Distilleries in November for $8.3 million. The release is designed to help companies with multiple marketing campaigns determine which should be directed at individual customers--currently a complex, labor-intensive process. The software is available now, starting at $125,000.

Genalytics began shipping earlier this month version 5.0 of its predictive-analysis software for financial-services, telecommunications, and retail companies. The release, priced at more than $100,000, has an improved data-extraction engine and enhanced analytical algorithms that make faster, more-accurate customer-behavior predictions, the company says.

Upromise Inc., which operates customer-loyalty programs for other companies, uses Genalytics to identify the best prospects for E-mail and direct-mail marketing efforts. Sha Hsing Min, database marketing and analytics director, says Upromise gets "some insight into why consumers behave in a particular way."