Descriptive Analytics refers to a technique that uses descriptive modeling with big data. In this context a machine learning model serves as an explanatory tool in order to distinguish between data objects.. This analytics approach is different from Predictive Analytics or Prescriptive Analytics. An often related term is also Business Analytics. One example of a descriptive analytics process is as follows. If the descriptive model is a classification model then this type of analytics is used to distinguish between instances of different classes. This descriptive model summarizes the data and is able to explain what exact features define a certain class or another.
In customer business environments descriptive analytics are used to describe real-world events and certain relationships between factors that are responsible for such events. This in turn helps the marketing or advertising divisions in companies to better understand their customers. In other words companies are better able to target their marketing and advertising efforts based on a sound descriptive model. One example is customer group clustering according to known factors like demographics, purchasing behavior, or indicated interests for certain products. These known factors are often called descriptive factors. In a subsequent analytics process using statistical methods one can find out which customer groups share similarities or where they differ.
Experts also often use the term segmentation in descriptive analytics. Customer segmentation is the process to partition the customers of a company into groups with having various impacts on marketing and offered services. More strategically value-based segmentation is used to identify and quantify the value of a certain customer to the organization. This can be useful to select the best service person for one of the most valuable customer of a company. Often companies use already behavior-based segmentation that analyzes the customer product usage and a wide variety of purchasing patterns. A more forward looking descriptive analytics process is needs-based segmentation that identifies ways to capitalize on motives that drive a specific customer behavior.
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