Boost Your Marketing ROI with Predictive Analytics

Boost Your Marketing ROI with Predictive Analytics

Marketers have always tried to know what goes on in the mind of their customers. In today’s competitive business landscape, that’s no longer enough. Marketers must go beyond knowing the preferences and behaviors of their customers to being able to predict their future actions. What if you could know exactly how to turn a one-time buyer to a repeat customer? What if you could estimate if a customer is likely to change providers? Good news is, the golden key to this type of predictive intelligence is probably sitting right under your nose. It’s your data.
Most companies have hoards of data—from marketing data, internal customer data, and structure data such as click through rates or engagement levels—at their disposal. But the biggest question is, how to sift through all those data piles to find actionable insights? The presence of data in functional silos, limited access to deep data analytics skills, and the frenetic pace of change further complicate the problem.
Using predictive analytics can help marketers overcome these roadblocks and leverage data in the most effective way. As such, it holds the answers to some of the biggest marketing conundrums: How to present the right message, to the right people, at the right time? Or determine which services will best suit a customer? Or plan in advance which promotional campaigns deliver the most value to a specific customer segment?
A recent Harvard Business Review article shares an interesting story about how a Harley-Davidson dealership rebounded from the verge of closure to witnessing nearly 3000% increase in leads, using AI-based predictive analytics.
According to a survey of B2B marketers by Forrester, organizations that used predictive analytics were likely to see 2.9% more revenue growth and about 2% more likely to meet or exceed sales goals.
So, how can you apply predictive analytics to improve your marketing ROI? Here are some ways.
1. Better Segmentation
Creating segments is a method to divide the market into smaller subgroups. This could be done on the basis of similar preferences, demographic, location, or behaviors. Segmentation helps you better target your potential customers and offer them personalized experiences.
By analyzing data generated during every interaction across all touch points, you can determine your target segments and how to position your messages for maximum impact. Not only that—you can even get a clear idea about which of your marketing materials (blog posts, e-books, white papers or brochures) resonate with the customers and how effective they are. Content marketing can bring significant ROI for your company, but only when you know what’s working and what’s not.
Predictive analytics also enables you to identify the most profitable groups of customers/prospects based on purchase behaviors within each segment. Knowing which of your target segments are likely to generate more profits, you can allocate your resources to them.
2. Reduce Customer Churn
Customer retention is incredibly important—even more than customer acquisition—for a company’s growth. After all it’s more expensive to acquire a new customer than retaining an existing one.
Data can help you predict which customers are about to stop buying from you; this is also called “churn.” By analyzing past behavior, you can identify the warning signs and patterns of customers who have churned previously. Armed with this knowledge, you’re better positioned to minimize such occurrences and protect your baseline.
3. Restructure Your Pricing Strategy
When pricing your products, you realize that there’s no one-size-fits-all strategy. Customers are different and so are their preferences and expectations. Certain customers would be willing to pay extra for a service. Stepping up the price for such customers and reducing the price for others can be a way to keep everyone happy and still meet your ROI goals.
Predictive analytics can facilitate identifying the factors determining the impact of price on demand. With the help of predictive models, you can come up with pricing strategies that maximize ROI.
There are many other ways to transform your marketing with predictive analytics. But what’s more important is to remember that a clean and organized database is the cornerstone of a successful predictive analytics strategy. If you don’t have a process in place to collect and store high quality data, you could be trawling endlessly in the sea of data without seeing any result. This is why working with an experienced, data-driven marketing solutions partner ensures your business gets all the benefits that a solid predictive model promises.

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Boost Your Marketing ROI with Predictive Analytics
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So, how can you apply predictive analytics to improve your marketing ROI? Here are some ways.
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