Have you heard of Predictive Marketing?
In a nutshell predictive marketing is an approach that uses big data to develop more accurate estimates of future customer behavior. More specifically, predictive marketing uses data science to accurately predict which marketing strategies are most likely to succeed. In short, predictive intelligence drives decision-making in marketing.
Predictive marketing is thus a marketing technique that uses data analysis to identify the marketing strategies most likely to achieve company goals. Companies can make use of business data, commercial activity data, marketing and sales data, and algorithms to align patterns and verify the most appropriate criteria for upcoming marketing actions. Companies that use this approach can make fact-based decisions and data to maximize results.
Predictive marketing prepares companies to gain more information about their customers in order to identify patterns to predict results and trends.
Predictive marketing is not a new approach, yet it is much more effective than earlier efforts, which required time-intensive ETL tools (extract, transform, load) to collect data from a variety of sources to create a single resource to analyze and identify potential customers based on their similarity to current customers. ETL is a three-step data integration technique used to combine data from multiple sources by building a data warehouse.
The predictive marketing boom was due to three key factors: the huge amount of data marketers can access from all available sources, access to real-time data, and the introduction of cloud computing provided by big data technology.
With increasingly accurate and sophisticated predictive marketing tools available in the market, marketers have access to superior results and can measure advertising and audience sources to develop campaigns with predictable responses. As tools offered by the market become more available, companies begin to perceive more clearly the value of this data-driven approach.
Data-driven tools have become more accessible to businesses and marketers in recent years, eliminating some of the need for data scientists to interpret data, and predictive marketing tools help companies use their data specifically to predict how their customers will shop, when they’ll shop, and how much they’ll spend, based on their past behavior. As these tools evolve, companies have been more able to use automated marketing systems that create templates, deploy lead scores, and gain real-time insights.
There are several benefits to having this perspective of consumers and their behaviors, including improving customer engagement, increasing revenue, achieving more sophisticated data segmentation, identifying more targeted campaigns and actions, better deployment of marketing budgets, and improving lead scores. It eliminates much of the “guesstimating” of marketing and empowers companies to make more accurate forecasts.
The benefits of predictive marketing can be best seen in Figure 1.
Using predictive analytics tools for marketing, companies can improve results from marketing campaigns. Predictive marketing eliminates marketing strategy assumptions and enables firms to respond more dynamically to customer behaviors observed in different channels.