Using Big Data to Optimize Your Predictive Marketing
Posted by Guest Author on May 9, 2013 in Business Start Up Advice [ 0 Comments ]
Think about it, honestly, because it’s a crucial question in defining who you are as an entrepreneur or salesman.
More importantly, however, knowing the answer to this question may provide the direction for a step that could take you to a new level of success.
Reactors spend their time dwelling on what happened, and once you’re caught in that cycle it’s incredibly difficult to break out of it. You spend your critical thinking time on the events of yesterday. As a marketer, that means you’re focused on the actions consumers took in the past, but we’re learning more and more every day that we need to be using that evidence to find niche actions that data will predict for the future.
That’s why predictive marketing is vital to your growth as an individual and a business.
What is Predictive Marketing?
Predictive marketing is about looking to the future decisions your customers will make and acting accordingly. It’s what Dan Neely, founder of Networked Insights, calls “pre-informed marketing.”
- The day of the marketer moving on hunches is fading away. There’s simply too much data available to us today to market with guesswork. “We’re all big data companies now,” Neely said at a recent presentation at Chicago’s 1871 tech incubator. “We have to try and extract the value from the increment.”
How Do We Do That?
First, you need to understand who your customers are today. Using your POS system, ecommerce software, and other sales tools, you must collect data on who your customers are and what they’re buying, but you have to stay current. In a world where trends come and go faster than ever before, you can’t sit on data and sift through it for months before you act on the knowledge it holds.
Then, we look at predictive analytics. You want to find trends in your customer data to predict what your customers want.
- With these two data sets you can begin to draw correlations and understand the “Why” factor. You can begin to see trends that will repeat themselves in the future. Supply chain gurus for instance, rely on this so they can forecast supply correctly.
This is predictive analytics, but how does it apply to marketers or relate to predictive marketing?
The difference comes in how you apply the analytics. Predictive marketing is the “now what” of predictive analytics to marketers. With this tool, you are able to analyze, “How long should an article be on the home page? Which customer website actions are most predictive of conversion? What is the forecasted sentiment of a specific Facebook post?”
- John Bates of Adobe’s digital marketing blog says predictive marketing “…offers the cure to almost every ill-informed analysis and poorly managed optimization effort by unearthing hidden patterns in large sets of data and providing foresight for future decisions.”
You might call predictive marketing something different – smarter marketing. It doesn’t mean everything is about data. We still need to be creative, we still need to connect, but using data more smartly will point us in the right direction sooner, and not waste that creative energy on the wrong targets.
We have been able to collect data on customers and find patterns for a while now. The future is in using this to look ahead; using data – not hunches – to optimize your marketing schemes.
Bio: Erik Severinghaus is the founder and CEO of SimpleRelevance, a Chicago-based company that creates automated, personalized email marketing. Prior to that he received a patent while in IBM’s IT Optimization organization, and helped co-found iContact—a leading Email Service Provider. Find him on Google+ and follow him on Twitter.