Predictive marketing has been a hot topic for marketers in the e-commerce space. Implementing high advanced technologies and concepts such as machine learning, artificial intelligence, and big data science allows predictive marketing to approach customer space in a completely new and unique way. For this reason, this kind of marketing is offering insight into a way many marketers never thought possible, marking a paradigm shift related to how and why products are sold.
In this blog, we explore what predictive marketing is, and give a few reasons why it’s made such a splash in marketing circles around the world. This way, you’ll be able to start marking a shift in your own marketing strategies!
What is Predictive Marketing?
Predictive marketing acts as its name would suggest – it uses complex technology to effectively predict what consumers want. Specifically, it implements predictive analytics to better determine which marketing strategies and actions are viable, i.e. which strategies have the highest probability to succeed or fail. Although this form of marketing may not replace a digital marketing agency altogether, it does provide a better way for keen marketers to identify customer patterns, and in doing this allows for more accurate anticipation of their behavior in the future related to sales trends and marketing outcomes.
Having access to this data means that a significant amount of guesswork is removed from marketing plans, saving large quantities of time and money for marketers in the long-run. Effectively, predictive marketing makes marketing more of a science, rather than a scramble in the economic dark. By carefully analyzing historical customer data, a very accurate picture is painted of how future activity is shaped. Although not completely fool-proof, it affords marketers a rock-solid place to start from in their e-commerce endeavors.
The benefits and challenges of predictive marketing
Readers may have related the practice of data gathering and prediction to marketing practices that are already common in the industry, but it’s the way that predictive marketing gathers this data that makes it so effective. Machine learning allows for the rapid processing of staggering amounts of information, which in turn saves vast amounts of time when applied to the developing strategies. The comprehensive algorithm-driven AI used in predictive marketing, therefore, allows marketers to gain a much more detailed insight into customer behavior, which leads to better developed predictive models, the identification of more profitable leads, and better analysis of program performance.
Predictive marketing also allows for personalized responses to an audience, which leads to far better audience retention. There are occasions where predictive marketing doesn’t work as well as it should, however – siloed data, fluctuating insights, and delayed reporting can all contribute to inaccurate data streams, and for this reason, it’s important that accessible data is free of any such obstructions.
Predictive marketing is the future of marketing
All of the benefits of predictive marketing that we’ve listed have long-since been recognized by some of the biggest companies in the world – research and development have thus far been significant, with big players like Amazon already utilizing facets of predictive marketing in their e-commerce store. For consumers, a good way of looking at predictive marketing is as analytics of convenience – e-commerce giants, as well as the little players, will soon be able to understand what you want before you even know it – for better or worse.