The Motivation For Using Predictive Marketing
The motivation for using predictive analytics in marketing is driven by two main factors:
- It is very valuable compared to guessing marketing outcomes or using gut feel.
- In addition, science is mature enough to deliver highly accurate results.
Marketing results, like in many other fields, are dominated by the Pareto Principle. This principle is named after the 19th century Italian economist who noticed that 80% of the land in Italy was owned by just 20% of the rich Italian families. Economists have noticed that the 80/20 rule, as it was called, applies to many other fields as well.
In Marketing, the 80/20-rule means that 20% of your campaigns, ads and creative ideas drive 80% of your revenue. For example, in lead generation, in most cases, just 20% of the leads are responsible for 80% of sales. In fact, calling on the other 80% of leads would be loss of resource and money. Just imagine how you can increase your effectiveness if you can predict those 20% ahead of time and focus on them.
This is exactly what Predictive Marketing does.
Today, we see that the demand-gen processes at organizations are inefficient. Industry stats show that 60-80% of incoming leads have no chance of closing. 40-50% of leads are nurtured in the wrong track and as a result, the vast majority of potential revenue is left on the table.
Predictive Marketing can help to make the marketing and sales process a lot more efficient by eliminating waste and allowing the organization to focus on the leads with the highest likelihood to close.
In addition, data and technology has matured to deliver valuable results.
The emergence of social networks, content marketing and online media has tremendously increased the digital footprint that companies and individuals leave online.
Unlike offline data, online data can be harvested and analyzed in a way that provides very accurate predictions.
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