Predictive Marketing: Definition, Benefits and How it Works
Understanding Predictive Marketing
The existence of big data is an important capital to drive modern marketing. What is predictive marketing, namely a practice to analyze customer data with the aim of predicting behavior and preferences in the future.
The beginning of the use of predictive marketing was from the application of predictive analytics since 1930. Where at that time, predictive analytics was used to analyze a person’s health condition to weather analysis. Until then, around the 1990s, tools were available to facilitate analysis so that predictive marketing began to be used by businesses.
Benefits of Predictive Marketing
Since then, predictive marketing has been used by business people to be able to increase the effectiveness of their marketing strategies. Here are some of the benefits of predictive marketing in business:
1. Improve target market segmentation
Machine learning can be used to help business people improve the quality of target market grouping decisions by analyzing relationships between customers.
With the results of data analysis, business people can sort and read target market segmentation in the right way to improve marketing. It is expected to have a more personalized marketing method for targeted customers and potential customers.
2. Accurately predict consumer trends
Customer preferences are always changing, so predictive analysis is needed to analyze data from various sources.
The data used includes customer sentiment data, online content, and contextual data such as location and weather.
If business people can recognize trends that are developing in the business market, this is an advantage in itself because it has a big influence on marketing success.
3. Retaining customers
Predictive marketing strategies can also be used to identify customers who are most likely to become unattached and then unsubscribe.
If identified, these customers can then be included in a re-engagement program to provide a personalized customer experience that can prevent customers from unsubscribing.
This is very effective in retaining existing customers so that the risk of losing customers can be minimized.
How Predictive Marketing Works
The important thing to consider in predictive marketing is to get accurate data. The greater the amount of data you have, the better the results will be. Predictive marketing strategies use machine learning and artificial intelligence technology that implement various algorithms and predictive models to carry out predictive marketing.
How predictive marketing works is by combining data science with knowledge in the marketing field to make intelligent and accurate predictions. The predicted data includes what actions customers might take, what products they will buy, when they make purchases, and how likely the customer is to be involved in a particular channel.
Predictive Marketing Strategy
In order for the implementation of predictive marketing strategies to be effective and successful in increasing sales in business, pay attention to the following:
Even though you already have predictions for business marketing, it is important to understand that they are only estimates. You still have to make a backup plan to anticipate the unexpected so that the marketing strategy continues to run smoothly.
To carry out predictive marketing requires a fairly expensive cost because the tools are not always available at affordable prices. This causes only businesses that have developed to use predictive marketing because they require the use of quality tools.
Requires human resources who are able to process large amounts of data. Data processing in predictive marketing strategies requires a long process including data collection, sorting and analysis.
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