What is Prescriptive Analytics? Definition & Examples

Analytics is not just about looking at data and trying to understand it. It’s also about using that data to make decisions, which is where prescriptive analytics comes in.

Prescriptive analytics is a type of data analysis that uses data visualization to help you make decisions more efficiently.

This blog post will explore some prescriptive analytics examples and how data visualization can help you do prescriptive analysis more efficiently. We will also touch on some of the benefits of prescriptive analytics and how it can help you improve your decision-making process.

Table of Content:

1. 1. What is Prescriptive Analytics?
   2. What are the Benefits of Prescriptive Analytics Examples?
   3. What is the Approach to Handle Data for Prescriptive Analysis?
   4. How to Visualize Prescriptive Analysis Data to Generate Insights?
   5. How to Create Charts in Excel to Conduct Prescriptive Analysis?
   6. How to Create Charts in Google Sheets to Conduct Prescriptive Analysis?
   7. Prescriptive Analytics Techniques and Examples
   8. Wrap Up

What is Prescriptive Analytics?

Prescriptive analytics is a branch of data analytics that provides recommendations on actions to achieve the desired outcome. It uses data, statistical analysis, and modeling techniques to identify the best step to take in a given situation.

Prescriptive analytics examples can find pricing, inventory, marketing, and other strategic issues in business. Prescriptive analytics can also optimize operations, such as supply chain management and customer service.

Data visualization is a powerful tool for prescriptive analytics. By visualizing data, analysts can quickly identify relationships and patterns that would be difficult to see in raw data. Data visualization can also help analysts communicate their findings to decision-makers.

There are many prescriptive analytics tools available for data visualization. Some of these tools are designed specifically for prescriptive analytics, while others are for more general purposes.

What are the Benefits of Prescriptive Analytics Examples?

The goal of prescriptive analytics is to provide predictive information about customer behavior. Also, on business processes that can be used to make better decisions.

Well, the benefits you gain from prescriptive analytics depend on:

• The quality and quantity of your past performance data.
• The quality of your future predictions.

Here are some benefits of prescriptive analytics:

• Increased Revenue

Identifying areas where you are performing well and where there’s room for improvement gives you more time and money to focus on them. This allows you to take shortcuts in less profitable regions and reinvest in them when they become profitable again.

• Improved Customer Experience

When customers experience your company’s products or services in ways that are different than they anticipated, they are likely to be more satisfied with their experience. As a result, they will recommend your company to others.

This leads to increased sales and market share, which can benefit all stakeholders involved. Those involved, from manufacturing through distribution channels to retailers where customers purchase their products or services.

• Visualize Data to Identify Trends and Patterns

Prescriptive analytics can help you determine which marketing channels will be most effective for your company. For example, if your company has seasonal sales patterns and wants to focus on those during the summer months, prescriptive analytics could allow you to optimize your marketing efforts accordingly.

• Instruct both Long-term and Immediate Business Activities

Decision-makers can simultaneously evaluate anticipated and real-time data to make choices that will promote long-term success and growth. Providing detailed advice facilitates decision-making.

• Put More Effort into Acting Rather than Pondering

Your team can focus more on creating the ideal solutions because of the quick turnaround of data analysis and outcome prediction. In a fraction of the time, artificial intelligence can curate and process data more effectively than your staff of data engineers.

• Reduce Bias or Human Mistakes

Prescriptive analytics offers more specific and accurate data aggregation and analysis. This is as compared to descriptive analytics, predictive analytics, or even individuals. Thanks to more sophisticated algorithms and machine learning techniques.

What is the Approach to Handle Data for Prescriptive Analysis?

There are several steps you can take to effectively handle prescriptive analytics:

1. Define the problem: Clearly define the problem you are trying to solve and what decision you are trying to make.
2. Gather and prepare data: Collect the data that is relevant to the problem and ensure that it is in a usable format.
3. Analyze the data: Use statistical and analytical techniques to understand the data and identify patterns and trends.
4. Generate insights: Use the insights you have gained from the data analysis to inform your decision-makers.
5. Actions: Take and refine your actions based on the insights and test the results.

How to Visualize Prescriptive Analysis Data to Generate Insights?

Once you have data it is useless until you identify what exact story this data is telling. Identifying the real information hidden inside the data is a tedious task. It becomes more difficult when the data is more complex.

Let’s suppose you have survey feedback data in which the customers have provided feedback on certain questions. This data will be huge and it will require your time and energy to find the customer attitude toward your product of services. But here is the solution, if you map this data to relevant visualization you can get the insights in no time.

Now, the question is what is the best and easiest way to visualize your data? The answer is you can visualize your data by using ChartExpo library. This library contains plenty of visualizations that can solve your problems quickly by using the relevant chart and graph.

For survey data analysis, this library provides a beautiful chart i.e. Likert Scale Chart. A Likert Scale Chart is a tool used in survey research to measure people’s attitudes, opinions, or behaviors and you can use this library in Excel or Google Sheets.

Keep reading to learn how you can use Likert Scale Chart in Excel to have prescriptive analysis in smarter way.

How to install ChartExpo in Excel?

1. Open your Excel application.
2. Open the worksheet and click on the “Insert” menu.
3. You’ll see the “My Apps”.
4. In office Add-ins window, click on “Store” and search for ChartExpo on my Apps Store.
5. Click on “Add” button to install ChartExpo in your Excel.

ChartExpo charts are available both in Google Sheets and Microsoft Excel. Please use the following CTA’s to install the tool of your choice and create beautiful visualizations in a few clicks in your favorite tool.

How to Create Charts in Excel to Conduct Prescriptive Analysis?

Let’s say that you recently introduced a new product and want to improve it. To do this, you ask your customers the questions that are displayed below.

• Would the cost of our product be reasonable?
• Do you believe this product’s quality to be superior to others?
• Should the product packaging be altered?
• Do all of your city stores carry our product?

And there is a specific scale available for each response. Let’s examine the Likert Scale and rating system.

• 1 = Strongly Disagree
• 2 = Disagree
• 3 = Neutral
• 4 = Agree
• 5 = Strongly Agree

The survey results are now presented in a table as follows:

Questions	Scale	Responses
Do you think the price of our product is affordable?	1	179
Do you think the price of our product is affordable?	2	127
Do you think the price of our product is affordable?	3	344
Do you think the price of our product is affordable?	4	707
Do you think the price of our product is affordable?	5	645
Do you think quality of the product is better than others?	1	141
Do you think quality of the product is better than others?	2	169
Do you think quality of the product is better than others?	3	112
Do you think quality of the product is better than others?	4	649
Do you think quality of the product is better than others?	5	931
Should we change the product packaging?	1	176
Should we change the product packaging?	2	161
Should we change the product packaging?	3	368
Should we change the product packaging?	4	729
Should we change the product packaging?	5	568
Do you think our product is available in all stores in your city?	1	150
Do you think our product is available in all stores in your city?	2	126
Do you think our product is available in all stores in your city?	3	160
Do you think our product is available in all stores in your city?	4	638
Do you think our product is available in all stores in your city?	5	928

• To get started with ChartExpo, install ChartExpo in Excel.
• To use ChartExpo after installation, select My Apps from the INSERT menu.

• Select ChartExpo from My Apps and choose Insert.

• Once ChartExpo is loaded. Click on Likert Scale Chart from the list of charts.

• Click “Create Chart From Selection” after selecting the data from the sheet. The Likert scale has this arrangement:
  • 1 = Strongly disagree
  • 2 = Disagree
  • 3 = Neutral
  • 4 = Agree
  • 5 = Strongly agree

• The Likert Scale Chart will look like as below.

• If you want to have the title of chart, click on Edit Chart button as shown above.
• To change the title of the chart, click on the pencil icon that is available very next to Chart Header.
• It will open the properties dialog. Under the Text section, you can add a heading in Line 1 and enable the Show option. Give the appropriate title of your chart and click on Apply button.
• For saving changes click on the Save Changes.This will persist the changes.

• The final representation of the Likert Scale Chart is as follows:

How to Create Charts in Google Sheets to Conduct Prescriptive Analysis?

Sankey diagrams are useful for visualizing the flow between different levels. They can help identify areas for improvement or inefficiencies, and can be easily understood by a wide audience.

Using the following example, let’s learn how to create a Sankey Diagram in Google Sheets. Below you have website traffic flow data.

Starting Point	Platforms	View product & details	Read Reviews	Add to Cart	Cart Status	Ending Point	Traffic
External Ad	Mobile App	View product & details	Read Reviews	Add to Cart	Clear Cart	Exit	29246
External Ad	Mobile App	View product & details	Read Reviews	Add to Cart	Checkout	Purchase	6133
External Ad	Mobile App	View product & details	Read Reviews	Add to Cart	Click on another product	Purchase	12954
External Ad	Mobile App	View product & details	Read Reviews	Add to Cart	Clear Cart	Exit	22337
External Ad	Mobile App	View product & details	Read Reviews	Add to Cart	Checkout	Purchase	14685
External Ad	Mobile App	View product & details	Read Reviews	Add to Cart	Click on another product	Purchase	10210
External Link	Mobile App	View product & details	Read Reviews	Add to Cart	Clear Cart	Exit	29605
External Link	Mobile App	View product & details	Read Reviews	Add to Cart	Checkout	Purchase	27600
External Link	Mobile App	View product & details	Read Reviews	Add to Cart	Click on another product	Purchase	5637
External Link	Mobile App	View product & details	Read Reviews	Add to Cart	Clear Cart	Exit	23336
External Link	Mobile App	View product & details	Read Reviews	Add to Cart	Checkout	Purchase	28281
External Link	Mobile App	View product & details	Read Reviews	Add to Cart	Click on another product	Purchase	17939
Direct Search	Mobile App	View product & details	Read Reviews	Add to Cart	Clear Cart	Exit	5490
Direct Search	Mobile App	View product & details	Read Reviews	Add to Cart	Checkout	Purchase	19138
Direct Search	Mobile App	View product & details	Read Reviews	Add to Cart	Click on another product	Purchase	27311
Direct Search	Mobile App	View product & details	Read Reviews	Add to Cart	Clear Cart	Exit	19560
Direct Search	Mobile App	View product & details	Read Reviews	Add to Cart	Checkout	Purchase	24788
Direct Search	Mobile App	View product & details	Read Reviews	Add to Cart	Click on another product	Purchase	10914
Organic Search	Mobile App	View product & details	Read Reviews	Add to Cart	Clear Cart	Exit	29043
Organic Search	Mobile App	View product & details	Read Reviews	Add to Cart	Checkout	Purchase	12028
Organic Search	Mobile App	View product & details	Read Reviews	Add to Cart	Click on another product	Purchase	24685
Organic Search	Mobile App	View product & details	Read Reviews	Add to Cart	Clear Cart	Exit	8508
Organic Search	Mobile App	View product & details	Read Reviews	Add to Cart	Checkout	Purchase	12448
Organic Search	Mobile App	View product & details	Read Reviews	Add to Cart	Click on another product	Purchase	5034
External Ad	Official Website	View product & details	Read Reviews	Add to Cart	Clear Cart	Exit	23552
External Ad	Official Website	View product & details	Read Reviews	Add to Cart	Checkout	Purchase	19632
External Ad	Official Website	View product & details	Read Reviews	Add to Cart	Click on another product	Purchase	18914
External Ad	Official Website	View product & details	Read Reviews	Add to Cart	Clear Cart	Exit	19234
External Ad	Official Website	View product & details	Read Reviews	Add to Cart	Checkout	Purchase	26871
External Ad	Official Website	View product & details	Read Reviews	Add to Cart	Click on another product	Purchase	29736
External Link	Official Website	View product & details	Read Reviews	Add to Cart	Clear Cart	Exit	14141
External Link	Official Website	View product & details	Read Reviews	Add to Cart	Checkout	Purchase	10680
External Link	Official Website	View product & details	Read Reviews	Add to Cart	Click on another product	Purchase	23756
External Link	Official Website	View product & details	Read Reviews	Add to Cart	Clear Cart	Exit	18491
External Link	Official Website	View product & details	Read Reviews	Add to Cart	Checkout	Purchase	15740
External Link	Official Website	View product & details	Read Reviews	Add to Cart	Click on another product	Purchase	5976
Direct Search	Official Website	View product & details	Read Reviews	Add to Cart	Clear Cart	Exit	19080
Direct Search	Official Website	View product & details	Read Reviews	Add to Cart	Checkout	Purchase	22204
Direct Search	Official Website	View product & details	Read Reviews	Add to Cart	Click on another product	Purchase	22736
Direct Search	Official Website	View product & details	Read Reviews	Add to Cart	Clear Cart	Exit	25578
Direct Search	Official Website	View product & details	Read Reviews	Add to Cart	Checkout	Purchase	11141
Direct Search	Official Website	View product & details	Read Reviews	Add to Cart	Click on another product	Purchase	6881
Organic Search	Official Website	View product & details	Read Reviews	Add to Cart	Clear Cart	Exit	18022
Organic Search	Official Website	View product & details	Read Reviews	Add to Cart	Checkout	Purchase	21183
Organic Search	Official Website	View product & details	Read Reviews	Add to Cart	Click on another product	Purchase	15307
Organic Search	Official Website	View product & details	Read Reviews	Add to Cart	Clear Cart	Exit	11557
Organic Search	Official Website	View product & details	Read Reviews	Add to Cart	Checkout	Purchase	26480
Organic Search	Official Website	View product & details	Read Reviews	Add to Cart	Click on another product	Purchase	29140

• To get started with ChartExpo, install ChartExpo in Google Sheets.
• Go to Extensions > Charts, Graphs & Visualizations by ChartExpo > Open.

• To access your chart library, click the Add new chart button.

• When this add-on has fully loaded, you can view a list of charts you can use. From the list, click the Sankey Chart.

• Choose the Metric option after selecting the sheet that contains your data. Add the corresponding numbers (in our example, we’ll add the Traffic).
• To add dimensional data, click the Dimensions button and enter the desired values (in our case, we’ll use Starting Point, Platforms, View product & detail, Read reviews, Add to cart, Cart status, and End point).

• You can use simple steps to create a Sankey Diagram in Google Sheets. The process is smooth and straightforward, thanks to ChartExpo.
• Click the Create Chart button to complete the quick procedure and generate a Sankey Diagram for your data.

• If you want to have the title of chart, click on Edit Chart, as shown in the below image.

• To change the title of the chart, click on the pencil icon that is available very next to Chart Header.
• It will open the properties dialog. Under the Text section, you can add a heading in Line 1 and enable the Show option. Give the appropriate title of your chart and click on Apply button.

• Click on highlighted pencil icon. To change the node color, click on the pencil icon available with the node. Expand the Node properties and change color from the Node Color property. Click on the Apply button.
• For saving changes click on Save This will persist the changes.

•  Final Sankey Diagram will look like as follows.

Insights

• As you can notice that most of your traffic came through External Ad, which is 233.5k.
• 456.03k traffic was generated by website which is most of traffic if we compare it with Mobile App 426.91k traffic.
• All the traffic landed on product page and read review as well. Almost all traffic added product in cart.
• 316.78k cleared their cart and exit.
• 299.03k checked out, & 267.13k clicked on another product. So they can also buy other product as well with current product in the cart.

Prescriptive Analytics Techniques and Examples

Prescriptive analytics is a way for organizations to understand their customers better, identify trends and make better decisions.

Prescriptive analytics aims to provide actionable insights that marketers can use to make more informed decisions about their target audience. Companies use rigid analytics techniques to uncover patterns in user behavior and analyze information in real-time.

Here are some examples:

• Algorithmic Recommendations for Content Curation

One of the best examples of prescriptive analytics in action is in algorithmic recommendations. If you’ve ever scrolled through Netflix, you’ve likely experienced prescriptive analytics through algorithmic content recommendations firsthand.

Businesses’ algorithms gather data based on your engagement history on their platforms.

Here’s how it works: Netflix uses various signals to determine what content you’ll enjoy, such as your viewing history, ratings, and reviews. Then, it uses machine learning models to predict what you might watch next.

This model considers everything from the type of show or movie you’ve watched in the past to your current mood and location (e.g., “I’m bored now”).

If you’re interested in seeing a particular movie or series, Netflix will recommend similar titles that are likely to interest you based on your previous viewing habits and preferences.

This helps people discover new things they like or find shows that would be great for watching with their friends or family members who also use Netflix at home. As a result, more people get hooked on these recommended titles, leading to higher overall engagement with Netflix’s platform and more revenue for the company.

• Investment Choices in Venture Capital

Prescriptive analytics can help venture capital firms make better investment decisions. For example, they can use predictive modeling to predict a company’s future value. They can also define a “good” outcome and use prescriptive analytics to help them achieve it.

• Sales: Lead Evaluation

Prescriptive analytics can be used to develop lead-scoring systems that allow salespeople to identify prospects with tremendous potential for success. These lead scores would include factors such as income level, number of dependents, and other factors that indicate a prospect’s likelihood of buying from an organization.

• Detection of Fraud in Banking

Banks can also use prescriptive analytics to identify fraudulent activity in real time. For example, banks could run predictive models that look at historical transactions and determine whether there is any evidence that someone is trying to hide money or assets.

For instance, if your monthly spending is $3,000 but this month, your credit card has been charged $30,000.

The algorithm examines your transactional data, which also warns the bank and offers a suggested course of action. The best course of action in this scenario could be to revoke the credit card because it’s possible that it was stolen.

FAQ:

What Companies Use Prescriptive Analytics?

Several companies, including IBM, Google, Microsoft, and Amazon, use prescriptive analytics. These companies use prescriptive analytics examples to help make decisions about their business operations. For example, IBM uses prescriptive analytics to help it manage its infrastructure, and Google uses it to help improve its search results.

Wrap Up

Data analytics has a reputation for being challenging to perform. The sheer volume of the information and its complexity and multi-disciplinary nature is enough to discourage even the most seasoned analyst.

Prescriptive analytics examples renders data analytics efficient by narrowing down the focus area through pattern recognition. It gives massive value to businesses by enabling actions that change the future. You can perform granular and accurate analysis with far greater ease and less effort than you would otherwise.

And the good news is that there are techniques that can help you to do prescriptive analysis efficiently, and they will be more powerful when they have a firm data foundation. Data visualization through ChartExpo, as observed, is one of the techniques. It gives you insights into your business’s past, current, and possible future states. So, get started with this guide for an insightful journey through prescriptive analysis.