Domo Arigato Mr. Clientboto
Future of Predictive Marketing
You know how the conversation used to go. After a two-hour-long presentation of insights, strategy, ways-in, creative work that went from traditional media, digital to experiential activations the Brand Manager took a look and asked: “Is this going to work?”. Everyone in the room would evade eye contact with clients, look at the scapegoat, sorry I mean the Account Director, and he or she would usually answer: “I believe so” or “Let’s do a focus group”. Partly based on this flawed, subjective, potentially biased, purely gut feeling conversations between agency and brands a new measurable and more precise solution to customer connection called predictive marketing was born. Predictive marketing takes most of the guessing out of the brand’s growing issue of connecting with their smart, sneaky and agnostic consumers.
Before you go hiring Walter Mercado as your predictive marketing advisor, you must know there is a method to the madness. Actually it is all about the method. It entails new technologies, finding relevance between that new technology and the brand’s existing data gathering capabilities, the gathering of big data and everything that entails predictive analysis. This is a game changer that although it does not eliminate classic brand-to-consumer efforts, such as branding campaigns and so on, it does give an amazing boost to that conversation by learning from the consumer actual behavior. It is sort of like those classic National Geographic documentaries where field researchers would sit for a month hidden behind the bushes watching animal behavior and learning from it. This behavior is done by computer programs and machines, but at the end of the day humans take in that data and translate it into a message that connects. So, it is indeed like National Geographic but with the data being gathered by robots and without the risk of being eaten by a lion. A definite win-win situation for any CMO.
In Omer Artun and Dominique Levin’ book “Predictive Marketing: Easy Ways Every Marketer Can Use Customer Analytics and Big Data” you can notice two things. One, it obvious by the title they chose for their book that creativity is not their thing and that behavioral science is a definite path for the future of marketing. Mr. Antun is a Brown University graduate specializing in data science and machine-learning business solutions and Mr. Levin is a Harvard graduate who is passionate about the marriage between “human creativity with technology learning in order to deliver value to customers”. This background is important because the solutions that will keep our industry relevant for generations to come will not come from the traditional advertising institutions, but from a new landscape made up of creatives, innovators, scientists, psychologists, programmers and dreamers. Also, predictive marketing was born outside the marketing department which makes it a tool born from multi-discipline for multi-discipline, useful for marketing departments, top-level decision makers, sales and client-facing assets.
The most radical change predictive analytics has brought about is the shift in the brand’s priority in its consumer chain. Acquisition is still a very important goal, but retention has become the absolute paradigm for many companies. It is a whole new way of seeing your consumer. Artun and Levy write: “Customers are the unit of value for any company and therefore customer lifetime value is the most important metric in marketing. If you maximize the lifetime value, or profitability, of each and every customer, you also maximize the profitability and valuation of your company as a whole.”
Shreesha Ramdas, CEO of Strikedeck mentions Amazon as a great benchmark for predictive marketing. “Amazon is a great example of how to do this well. They were one of the first to understand their customers’ attributes by customers and then use this insight to help make the shopping experience more efficient and more enjoyable. By the way, they have also perfected using this insight to upsell, cross-sell, and create “sticky” products that enhance customer loyalty through a better experience.”
There are many ways to get your brand on a predictive marketing program. Many in Puerto Rico are familiar with CRM programs that manage contacts and communication, but that is just the tip of the iceberg and really just a piece of the pie to having full predictive and analytical capabilities. If your company does not have proprietary tools to custom-build predictive algorithms then the best way to get started is by outsourcing database marketing service providers or just going directly to marketing cloud solutions. They are also developing tools for content management and simplified data reporting. Local brands that have partnerships with international companies can alsomplug in to existing turn-key solutions.
Just like any social movement, predictive marketing was born from the people. Specifically from the new teflon consumer who is demanding from brands less generic messages with a deeper understanding of who they are or want to become, from the urgent need to add value to the business equation that adds brands and their existing and the ever-growing pool of technical experts who keep hammering away at technologies to make them more useful for recognizing patterns in human behavior. Predictive marketing is technology at the service of human-centric solutions. Brave new methods for a brave new industry that looks beyond brand positioning into brand purpose.