Getting an edge on the competition is always a challenge, and the speed of innovation in digital tools means that new opportunities and strategies emerge frequently. For many of us, the first step in evaluating these is to get a handle on just what they are, and how they will apply to CRE.
One such strategy that’s creating some buzz is the use of predictive analytics. We can deduce that this somehow involves the use of data to make forecasts, but to really understand how this is a new idea, we need to explore more deeply.
Predictive analytics can be defined as the practice of evaluating and interpreting data to predict future outcomes and trends. It’s different from traditional analytics, which provide a picture of past events. This analysis applies data from a range of sources to the question of what will likely happen in the future. As our ability to gather and aggregate enormous amounts of data improves, this practice becomes ever more useful.
In a strictly practical sense, the use of predictive analytics can help you land more listings, and retain clients for the long haul. Here are some ways that happens.
Casting a wider net
One factor that makes predictive analytics so powerful is that the data provided comes from an incredibly diverse range of sources. Using management platforms, many industry professionals are working together, pooling their figures for aggregation. They’re finding that in many cases, sharing information makes everyone stronger, and removes barriers to closing deals.
The information also comes from some new sources. Data are constantly being collected from inanimate objects –the “Internet of Things,” like building sensors and monitors that track pedestrian or vehicle activity in various locations. Social media are being monitored and mined electronically, along with other “unstructured” data sources.
This information is being folded in with data from more traditional sources -like professional associations like the NAR and government agencies -to cover the gamut of topics that relate to CRE –social issues, economic trends, climate, demographics, and more.
It’s this combination of information that makes these data reliable and powerful, and we can use them to direct our efforts more effectively.
Solving problems in real time
Predictive analytics provide the tools to solve real problems by referring to the appropriate mashup of data. The information can be used to address client issues that may not seem to be related to real estate. For example, an office tenant may be considering relocating, but wants to base the decision on more than a hunch. Big data can supply answers and clarify whether the space and location is actually the problem or if the issue is more related to available parking, scheduling issues, or other relatively simple issues.
Evaluating property is also facilitated by predictive analytics, and this data can be invaluable to clients. Data aggregators provide easy to understand reports that give insight into market outlooks and economic trends in various locales so that choices can be made with more assurance.
Supplying clients with this sort of useful information helps make CRE professionals indispensable. This is the sort of customer service that gets you key referrals and allows you to maintain long-term partnerships.