Predictive Analytics - Smarter Marketing Data Techniques
Predictive analytics is a data analysis technique that focuses on using technology to analyze data and make predictions or forecasts about future outcomes. Marketing teams looking for efficiency and optimization should be looking to predictive analytics to better inform their decisions and directions. Let’s look at why and how.
Think of it this way, many analytics techniques are descriptive: they describe your current analytics data and past events. That is their intent and goal. Now, most of us want to use analytics both to understand past performance but then also to apply insights for future goals. Predictive analytics is entirely focused on that second part—forecasting future performance.
Prescriptive analytics takes this one step further, but that's putting the cart before the horse. We’ll be focusing on predictive analysis and its value for marketing in this article.
How Does It Work?
To boil it down to basics, predictive analytics relies on sophisticated pattern recognition. It is the cornerstone of predictive analytics. Pattern recognition is the process of detecting regularities and repetitions in data. That also means, predictive analytics can identify irregularities and anomalies.
Data professionals have been doing predictive data analysis manually for years, but advancements in machine learning and AI have made this process much faster and allow us to analyze much MUCH larger data sets. Larger data sets almost always mean higher quality predictions.
By examining data in this way, predictive analytics tools and marketing professionals can reveal trends, cycles, clusters of data insights that help us predict marketing outcomes with greater outcomes.
What Can We Use Predictive Analytics For?
Refine Audience Segmentation
Predictive analytics techniques can be used to spot relationships between data and customer groups. Marketers can then use these patterns to group customers in different ways in order to improve targeting and personalization.
Predict Messaging Success
Marketers can optimize messaging through predictive analysis by identifying audience behavior and preferences. Data insights about messaging success can include channel optimization (what works on what channels), optimal timing, engagement goals, and even churn risk.
Apply Lead Scoring
Instead of only using traditional lead scoring methods, organizations can use predictive lead scoring, which can lead to much more accurate predictions of conversion and sales behavior. That can result in improvements in sales productivity and more aligned sales and marketing teams.
Focus on Trends
These options are just the tip of the iceberg. Predictive analytics can be used for high-risk customer identification, customer retention prediction, and more content strategy applications just to name a few. Start by asking yourself and your marketing teams what trends you need to understand to improve the performance of your marketing campaigns.
How Do We Get Started with Predictive Analytics?
There are multiple types of predictive models, applications, and tools. For due diligence and to ensure you’re choosing the right approach and tech stack, we recommend:
Identifying your business objective: Define the questions and use cases you want to use predictive analytics for.
Determine your data needs: What data will you need to answer the questions and address the use cases defined in step one. Is that data currently available or will you need to acquire additional data? If your data is available, is it complete and large enough?
Analyze your tech stack and available predictive analytics tools to ensure you’re selecting the right tools for your needs and that it integrates well with the rest of your existing tech stack.
Create a process plan for implementation and management plan.
Identify ownership of predictive analytics processes: Predictive analytics can take a very specialized skillset covering data preparation, analysis, and reporting capabilities. In addition, you need skillsets for the predictive analytics tools identified for use.
If you need help making a business case for predictive analytics, creating a process plan, or managing your predictive analytics, we can help. It’s a powerful technique and tool in your marketing tool belt, but only if you can apply and manage it properly.