predictive modeling

In customer relationship management (CRM), predictive modeling is used to create a statistical model for future behavior. It's also used in email filtering systems to identify the probability that a given message is spam.

Predictive modeling is a process used in predictive analytics to create a statistical model of future behavior. Predictive analytics is the area of data mining concerned with forecasting probabilities and trends.

A predictive model is made up of a number of predictors, which are variable factors that are likely to influence future behavior or results. In marketing, for example, a customer's gender, age, and purchase history might predict the likelihood of a future sale.

In predictive modeling, data is collected for the relevant predictors, a statistical model is formulated, predictions are made and the model is validated (or revised) as additional data becomes available. The model may employ a simple linear equation or a complex neural network, mapped out by sophisticated software.

Predictive modeling is used widely in information technology (IT). In spam filtering systems, for example, predictive modeling is sometimes used to identify the probability that a given message is spam. Other applications of predictive modeling include customer relationship management (CRM), capacity planning, change management, disaster recovery, security management, engineering, meteorology and city planning.

This was first published in April 2009

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