One of the most important measurements for your business is often misunderstood.
Imagine you had a crystal ball and could see into your customers’ lifestyle and spending habits. You could guess when they were going to be in your store; what problems they were going to be having; and, most importantly, when they were going to buy. You know their interests, their budget, and whether they prefer to shop online.
That’s the basic idea behind predictive analytics. Predictive analytics uses data to try and guess future outcomes.
Types of predictive analytics could include:
- Likelihood of engagement on social media posts
- Actions that are probable to be taken on e-mail blasts
- Price of probable purchase
- Dates or times of likely action
- Online platforms likely to frequent
For instance, if someone has never purchased from you before, odds are slim that he or she will splurge on your largest online course. But if someone has steadily been purchasing everything you’ve released, chances are high that he or she is a good person to market your new $400 e-course to.
So, what do predictive analytics help with? Prioritization. They help you understand who to market to. If someone follows your company on Facebook but has never liked a post or purchased a product, don’t spend all of your time chasing him or her. Instead, focus on the consumers most likely to buy from you. They also help you prioritize which platforms to spend the most time on. If nobody who found your website from Instagram has ever purchased from you, it’s probably not a place you want to throw time, energy, or dollars behind.
Predictive analytics can also be helpful when it comes to determining your overall marketing strategy. Understanding how your customers act is the bedrock of planning out your sales and marketing plan. If people tend to click from your home page to your about page, you know your about page needs to either talk about your products and services or lead people to your sales page. If consumers tend to frequent your brick-and-mortar store around 5:00 p.m., you know that would be a great time to host any events or in-store deals. Simply put, the more information you have, the better you can form your strategy around your customers’ habits.
When it comes to knowing your customers, the more data the better. By learning as much as you can about their spending habits, you’ll be able to more effectively sell your products and services, leading to a better relationship and a better bottom line.