Predictive analytics in marketing – how to use it?
What would your business look like if you could predict customers’ reaction to an advertising campaign or price change? Certainly, your decisions would be taken more confidently. This is what a predictive analyst does. This is a modern element of marketing that effectively supports the implementation of selected strategies. What is it and how can it be best used in business?
What is predictive analytics marketing?
The change from a quantitative to a qualitative approach in internet marketing is nothing new. We use advertising banners online less and less often, and instead, we take advantage of the precise targeting possibilities available in performance marketing. In order to create a truly effective and personalized campaign, you first need to determine and understand very well the behavior of consumers at different stages of the sales funnel.
Predictive analytics is especially helpful in doing this. It consists in predicting future customer behavior based on historical data. Modern technologies, intelligent algorithms and statistical tools play an important role in predictive analytics. Predictive marketing, conducted with the use of advanced analytics, is able to provide a lot of valuable information and significantly increase the accuracy of business decisions.
Predictive analytics and consumer behavior
In this era of detailed targeting, the demographic information available, among other things, in the Google Analytics panel is no longer sufficient for optimizing ads. To be really successful in promoting yourself, you need to collect much more data. Predicting consumer behavior is helped by details like information about a user’s interactions with the given content, such as a comment, retweet, share or like. There are especially great opportunities available on the e-commerce market, where it is possible to track the history of an order, abandoned carts or reactions to promotions. Modern tools even allow you to measure how long the cursor hovered over a given product or track the entire visit of the user on the website (e.g. using the HotJar tool). Such activities help build a detailed user profile that can then be used in advertising activities.
Predictive analytics in marketing – how to use it?
Predictive analytics can be used at different stages of the purchasing path and for various purposes. The most popular are:
1. Acquiring new customers
By predicting the reactions of recipients to individual advertising activities, we are able to choose the optimal sources of acquiring customers. In this way, we can reach completely new market segments or increase conversion from current marketing and sales actions by selecting the channels and messages more accurately.
2. Preventing customer churn
Keeping existing customers engaged is much easier and cheaper than reaching new audiences. Therefore, it is important to maintain their loyalty and prevent them from drifting away from the offer. This can be achieved by using predictive marketing to segment customers based on historical data about their order history. This will allow you to precisely target groups that show the highest sales potential and effectively convince them to make further purchases with a specific offer. Thanks to such data, it is also possible to rank the risk of a given customer’s churn and on this basis to plan in advance activities that will help maintain his or her loyalty.
3. Building commitment
Predictive marketing can also be used to build a closer relationship with your customers. Recipients who have never bought anything from you may finally be persuaded to buy if you can increase their affinity or trust in the brand. Therefore, it is worth using predictive analytics to warm existing relationships and systematically move customers along the sales funnel.
4. Increasing the effectiveness of a promotion
Predictive marketing can also be used to optimize promotional activities. By predicting the reaction of recipients to individual ads, you can more effectively plan their formats, time and place of display, and message. Thus, it is possible to maximize your conversion rate and achieve much better results with a lower budget.
5. Lead quality assessment
With the help of predictive marketing, you can build an advanced scoring system. This will allow you to assess the quality of leads and focus only on those with the highest sales potential. Thanks to this, it is possible to optimize costs and improve the effectiveness of sales activities.
Of course, the above-mentioned ways to use predictive analytics are just examples. In fact, there are many more. Advanced analytics helps to significantly reduce business risk, optimize sales and marketing activities, accelerate return on investment and achieve much better results within an affordable budget. How you use predictive marketing depends on your needs, skills and the tools at your disposal.
Would you like to learn more about the possibilities of predictive marketing? Contact us or follow our blog where you will find a lot of useful information about web analytics.
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