Here’s my prediction: 2015 is the year when predictive analytics will go from “competitive advantage” to “necessity” for many businesses. What I’m seeing in the field is that predictive analytics is not just for big companies any more. Why? Because big data is no longer just for big companies – and predictive analytics is how you take all this data and turn it into something you can use.
What is Predictive Analytics?
Predictive analytics, also known as predictive modeling, is a way to use everything you know about your customers and prospects – and their behavior in different marketing/sales situations – to create a statistical model of future behavior.
Why is Predictive Analytics Important?
Predictive analytics lets you anticipate customer preferences and needs in order to deliver a more personalized marketing experience.
To understand why this is so important, you only need to think about hunting. The basic premise of hunting is that you need to shoot where the animal is going to be, not where it’s at right now. Likewise, predictive analytics helps you “hit the target” by predicting where your customers and prospects are going to be and what they’re going to want when they get there. This allows you to reach people at a time when they’re considering or ready to make a purchase, with a personalized message that resonates with them.
Predictive analytics is the foundation that goes under marketing personalization, retargeting ads, and many of today’s marketing tactics in general. It can provide the information you need to determine the timing and content of each element of a marketing campaign.
The Popularity of Predictive Analytics
According to the 2014 Sitecore Trends Report, over the next 12 months 44% of marketers plan to use predictive analytics. Not surprisingly, predictive analytics also ranked highly in this survey for areas in which organizations wish to see improvement – 50% of companies surveyed are focusing on getting better at predictive analytics in the coming year. Web analytics and personalization, both highly related to predictive analytics, also ranked within the top three improvement areas.
Predictive analytics fuels data-driven decision making, which in turn can improve results. Take a look at your databases, and chances are you’ll find that the amount of data you have available has grown exponentially in just the past few years. If you’re not already using predictive analytics to use all of this data to increase the ROI of your marketing efforts, now’s the time to get started.