Predictive marketing analysis is new and exciting and when it comes to marketing, whether you want to describe it as artificial intelligence, data science, or perhaps machine learning, this is where you need to be looking and focusing your budget.
If you’re not sure what predictive marketing is, think of your social media feed. If you’ve noticed some ads popping up for items you have searched for previously, this is the perfect example. The data from your searches is extracted and used to create advertising that is marketed directly to you. It is far more cost effective for the advertiser since their ads are being shown to the people who are most likely to buy from them, and also it means that you are more receptive to the ads since they are for something you want anyway – therefore, you won’t turn them off or hide them.
Yet there is – of course – a lot more to predictive marketing analysis than this. Predictive marketing is a way to get real value from your advertising campaigns, and to find income and customers where you might otherwise have lost them. Predictive marketing isn’t the only way you should be running your business, but it is certainly a good technique to have in your overall arsenal of marketing ideas that, together, create a successful, thriving business.
Convert Customers
When you run a business it’s great to see which customers are loving what you do and want to spend more of their time and money with you – you can focus your marketing on them. But what about the ones who aren’t so keen on your products, your services, and your way of working?
It might be tempting to forget about them and add to your customer churn (losing customers, in other words), but wouldn’t it be better to convert them? With automatic marketing, you can identify just what it is what they are not responding well to, and change what they are seeing to make them more receptive to you and what you are selling.
Predict Customer Churn
Of course, not everyone is going to be converted, and you will lose some people – both potential customers and current ones. Again, predictive marketing analysis can help you here. If you are able to predict customer churn, you will be able to predict income and budgeting too. It will make running your business a lot simpler.
You can see who is a ‘low churn risk’ (someone who has bought from you before and then buys from you again) and who is a ‘high church risk’ (perhaps someone who bought a lot from you in the past, but now doesn’t buy anything). Therefore, you can target the ones who seem to be most likely to leave you and bring them back to you.
Predict Customer Lifetime Value (CLV)
It is also important to be able to predict customer lifetime value when it comes to running a business. This will help you to determine how much income you might expect from customers who have bought from you in the past, as well as being able to see what they have bought in the past.
Why is CLV important?
To begin with, it can ensure that you are able to create a retention strategy so that customers who might have moved on to other stores will come back when they realise what they are missing out on. On top of that, you can create an acquisition strategy too, so that not only can you keep existing customers (which of course is more cost effective) but you can find more new customers too, and keep that search within a specific budget.
Predict Next Purchase Date
Wouldn’t it be fantastic for your business if you could turn those who are one time buyers into regular customers? Predictive marketing analysis can help with that too. You might even be able to use the tools to predict exactly when – down to the day – they are going to buy again.
If you can automate this and trigger the right kinds of promotions and reminders for customers who have bought from you in the past, then you are highly likely to bring back customers who have stopped shopping with you. Plus, if a customer who was predicted to buy something misses their purchase window, you can send out carefully targeted reminders and ads to ensure that they do in the end.
Conclusion
There is only so much you can do on your own without using this kind of technology to help you. Although you can certainly concentrate on only one aspect of marketing, be it customer retention or searching for new people to sell to, the only way to really be able to do this effectively is to use predictive marketing analytics.
Even when you widen your approach and use a number of different marketing techniques, having predictive marketing in the mix along with everything else will give you a distinct advantage over your competitors and ensure that you are able to capture the customers that you want, whether they are current, past, or potential.
