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How many times have you played whack-a-mole with campaigns?
You know what I mean…
Waiting weeks to months before you finally realize that a campaign is a dud.
It’d be nice to look ahead and have a hint, right?
Well, that can be a reality with predictive analytics.
It’s a form of machine learning that learns how an organization behaves to forecast performance, KPIs, and all of that fun stuff.
In particular, it’s incredible for marketing.
I’m going to be showing you how your company can use predictive analytics to enhance marketing in today’s article.
Follow along!
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Predicting and reducing churn
Churn rate is something that bogs down any business. It’s mainly a problem for those who sell software or a subscription service.
You’re going to spend a lot of time and money to acquire customers. So, you don’t want them fizzling away once you get them, right?
Well, what if you knew ahead of time when it might happen?
Maybe it’s at two months. Perhaps it’s four.
Knowing when customers are likely to churn allows you to take action to keep them around for longer.
And, according to Statista, the average churn rate for industries like online retailers is 22%!
You acquire 1,000 customers and you’re losing 220. Ouch.
That’s where predictive analytics comes into the picture.
Once it understands your business inside and out, it will have an accurate idea of when customers will leave.
Let’s say it three months for a SaaS company. Cool.
What do you do when you know this?
Leading up to the end of the third month, perhaps you:
- Offer customers a free discount.
- Give them a free consultation.
- Schedule a call to see how you can improve the product.
- Send them exclusive content and deals.
- Etc.
A.K.A, you add value to make them want to stay. But, it has to be timed perfectly when they believe there’s nothing more to get out of the service.
Continually dripping these items to users will improve their experience and likeliness to remain a paying customer.
Forecasting sales
Sales are everything. Without them, you have no business.
That’s why 75% of sales reps want to close more deals.
They are a clear indicator of whether or not marketing and advertising strategies are performing as intended.
Predictive analytics creates the opportunity to forecast the sales of products, strategies, and individual channels.
Drier than the Sahara desert? It’s time to fall back and adjust.
Forecasted to break the ceiling? Invest more in those campaigns and analyze why they’re big hits.
This is also why 79% of high-performing sales teams use predictive analytics. They know that it’s an insanely useful tool.
Gone are the days where you have to go through a phone book and cold call every prospect until the crack of dawn.
Now it’s all about efficiency.
Predictive analytics software determines which leads have the highest chance of becoming a customer. Sales reps should invest more time nurturing relationships with these individuals.
That brings me to my next point.
Segmenting customers
No customer is the same. Heck, customers within an already existing segment are unique, too. Those are called hyper-segments.
But, let’s keep it simple for a moment.
Being able to tailor campaigns and offers for specific traits is essential in 2020. We can’t be blasting out promotions and expecting everyone to love them.
Consider these findings from an Adestra and IDM report that researched email personalization:
Customizing emails to each recipient resulted in a massive boost in open rate, click-through rate, customer satisfaction, and sales.
Sure, you could go in like a surgeon and dissect your customer base through a CRM or analytics platform.
You’d be there for a year or two. But, it’d get the job done.
Why not let artificial intelligence do all of it for you? That’s not to mention that you can reallocate saved time to more valuable tasks.
It will find all of the prominent and not-so-obvious traits that compose buyer personas. This includes location, device, age, gender, etc.
You won’t have to continually throw money at testing audiences when the data are right in front of you.
But, it goes so much deeper than that.
Organizations will also be able to discover what subject lines customers engage with more, what products they’re most likely to purchase, and more.
Another indirect benefit is it allows your business to be more empathetic. You can present options, sales copy, and content that people deeply resonate with and enjoy.
Wrapping up predictive analytics in marketing
Staying up to date on what works and what doesn’t is crucial for long term success in business.
And, a tool you’ll regret not having leveraging in 2020 is predictive analytics.
It will completely transform your marketing and sales.
The software is capable of forecast marketing, sales, KPIs, and small details of campaigns. This insight allows a company to adjust in real time versus waiting for batched data to come in later.
The first significant use is predicting churn, as it’s a critical metric for some businesses. You can present valuable offers at the precise time customers are most likely to leave in the sales cycle to increase retention.
Secondly, predictive software forecasts sales and revenue. While it will estimate how much a company yields in general, it breaks down where it’s expected to be generated from, as well. This includes channels, strategies, and customer profiles.
That brings me to the final use case: customer discovery. This technology detects what traits and behaviours are the most common in high-value customers. Adjusting campaigns to target these segments has the potential to improve marketing output.
