Heuristics in Analytics: A Practical Perspective of What Influences Our Analytical World

Chapter 1

Introduction

Analytics is used to address many different types of business problems. It is used to understand customer behavior and how consumers may be adopting new products and services. It is used to describe different marketplace scenarios and their impacts. It is also used to decipher competitor’s movements and patterns. And it is used for predicting potential future revenue, detecting risk, uncovering fraud, minimizing bad debt, optimizing operational processes, and more. Analytics is used in all of these business applications.

In most cases, and in particular in customer scenarios, there are many factors that cause misunderstanding of what is currently happing within a market, or even what is happing with a specific customer within a particular market.

It is always important to bear in mind that consumers present different types of behaviors and in accordance with the market they are interacting with. As a customer, I can be very aggressive in terms of purchasing high-tech products, often buying cutting-edge gadgets. However, I am quite conservative in terms of investing, putting my money into low-risk accounts. There is no one, overall general behavior for any customer. We each behave in different ways depending upon the situation in which we find ourselves. Essentially, we wear different hats, having distinct behaviors that are observable—each in relation to the distinct roles we play. And sometimes, even in similar scenarios, we may play different roles and ...