Five steps to build better predictive analytics applications

This approach to predictive analytics applications can be illustrated by an example. Let's consider an e-commerce company that wants to boost its profits by growing sales to existing customers. The objectives might be to increase both the number of items bought by individual customers and the average amount they spend overall in purchase transactions. A typical strategy to accomplish those goals involves using a recommendation engine to try to influence customers to add items to their online cart as they shop. There are a variety of different analytics methods that the online retailer can incorporate into its recommendation engine to assign similar customers to groups so the engine can suggest products that they might be inclined to buy.