Predictive Marketing. Levin Dominique
often you called the call center, whether you are a first-time or repeat customer, whether you are a VIP customer or an unprofitable customer who returns more products than she keeps, and much more.
Most companies still find it very difficult to put any of this information to good use. The sheer size and breadth of the records make them incomprehensible for anyone without the training and experience to mine insights from large datasets. This is where predictive analytics and machine learning come in. Machines are very good at mining insights from large datasets automatically. Machines can remember the names of millions of customers with no effort and greet them accordingly, just as the shopkeeper from yesteryear would have done. In other words, using machines, humans can now bring back the personalized marketing interactions from yesteryear, even if their company has millions of customers. Figure 1.1 illustrates how the marketing revolution has come full circle. In the 1800s, shopkeepers had personal relationships with each and every customer. In the 1900s, during the industrial revolution, these personal relationships fell victim to mass marketing and a desire to scale businesses. Now, thanks to the technological revolution, marketers can bring back the personal relationships from yesteryear, while still operating companies at a large scale.
Figure 1.1 The Predictive Marketing Revolution
Predictive marketing is the perfect marriage between machine learning and human intelligence. The point of predictive marketing is not to replace marketers with machines but rather to empower and augment human intelligence with machine learning.
The Power of Customer Equity
Predictive marketing gives rise to a new, data-driven way to approach marketing, with the customer at its center. The ability to collect and analyze data on every single customer, as well as his or her interactions with your brand, allows you to serve your customers better and generate more sales. At its core, as Figure 1.2 illustrates, predictive marketing is helping companies to evolve from a product- or channel-centric orientation to a customer-centric orientation. Companies using predictive marketing focus on developing and managing customer relationships rather than just developing and selling products or channels:
● Instead of finding customers who will want your products, it is now possible to discover which products your customers will want in the future.
● Instead of maximizing sales, companies in the customer era focus on optimizing customer lifetime value and share of wallet to drive profitability of the enterprise.
● Instead of organizing around channels and product lines, companies which practice predictive marketing organize around the customer.
● With the customer at the center, companies are using big data and predictive analytics to configure processes and organizations to find ways to customize interactions.
● Communications become much more targeted and the key metric is relevance, not reach.
Figure 1.2 From a Product to a Customer Orientation
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