Imagine being able to forecast what percentage of your existing customers might be interested in another product offering or figuring out which marketing tactic works best for your target market based on your existing customers. Would this be helpful to you?
In this customer-driven business world, organizations are looking for practical ways to predict future behaviors of customers to meet their current needs, and also to stay ahead of competitors by predicting future needs. They are also seeking customer-based data-driven insights to support the organizational functions of their business. The future of these insights come from predictive analytics.
Predictive analytics enable us to predict the future by creating statistical models based on data we already have. There are a wide variety of applications along every step of the customer journey, from predicting good fit / bad fit customers, to strengthening relationships and increasing desired behaviors such as share of spend.
The power of customer information not only allows us to predict the future, but enables us to prescribe solutions that we already know will resonate with customers in a cost effective and efficient manner.
There are many different applications of analytical insights that can support and grow your business. For example, cross-selling is a challenge for any organization wishing to leverage their existing customer base to increase revenue, while also minimizing costs of acquiring new customers. By using existing customer data and historical spending patterns, predictive analytics enables you to create a profile for customers who are already cross-buying and target other customers who fit that same profile.
Consider also the challenge of retaining customers. Predictive analytics can show you which of your customers are more vulnerable to shrinking share of wallet or defecting altogether. By creating a statistical model to show behaviors and habits of customers over time, it becomes easy to spot the indicators that a customer has become disengaged with your organization. By targeting these customers early, organizations can take proactive steps to retain their business and protect the existing relationship.
So why aren’t more businesses leveraging the power of predictive analytics? We see this all the time: customer data, spending habits, and customer monitoring are usually on the backburner for many organizations. Because of this, customer databases may be fragmented, disparate, and overwhelming to tackle. Maybe the organization is unable to support analytical insights in house with their current staff or is hesitant to venture into data-driven statistical modeling.
In a consumer-focused and over-saturated market, the pressure is increasingly on organizations to find, keep, and retain customers. Predictive analytics and customer data are the key to unlocking the existing potential of your customer base and acquiring new customers in the most cost-effective and efficient ways, which has the power to grow your business in ways that have never been possible before now.
If you’d like more information about how predictive analytics could transform your organization, email us at info@loyaltyresearch.com to talk to a member of our Client Services team.