Amazon is already predicting whether the customer will buy the book of their choice. It's magic, or maybe reading in your mind? No, it is the in-depth knowledge of the user used by intelligent and "learning" data algorithms to simulate different scenarios, depending on their left "online" activity trace.
Anticipating the customer's purchase decision could shorten the delivery time. The "pre-shipment" patent was already filed by Amazon in 2014. But how could an Internet giant know what book will be ordered by an Internet user? Using predictive marketing.
What is predictive marketing?
The ever-increasing amount of data provided (consciously or not) by users encourages their analysis and systematization, which in turn allows for the development of new targeting and personalization techniques. Demographic data from Google Analytics does not say much about the personal profile of our potential customer. Only like on Facebook, retweet, comments on forums, abandoned shopping cart, order history, clicks on ads, blog activity, affiliate links or the length of time the cursor is held over a given product - a mix of these behaviours and activities allow you to build a profile of a given user.
Predictive marketing is a strategy based on the analysis of a huge amount of data, which aims to build relations between a brand and a potential consumer. The creation of deep ties, resulting from the unlimited possibilities of personalisation, opens up many new ways of exploration.
Magic analytics tool - algorithm
The power of foresight marketing lies not in guesswork, but in algorithms that can analyze users' behavior and habits using data from different sources (CRM, DMP, cross-device tracking, data from third parties, etc.). This information clearly indicates what the consumer is interested in and will increase the consumer's involvement, conversion and ultimately increase revenue.
Who has already earned from such predictions?
Netflix is the best example to show the benefits of forward-looking marketing. Currently, the service is used by over 100 million users all over the world. Therefore, the company collects huge amounts of data that help it make decisions that affect the quality of services provided.
Netflix based on the day, date, location, type of device, film or series ratings, search and scrolling can not only recommend, but also skillfully stop the customer and persuade him to buy a subscription. The analysis of users' preferences was of key importance in the decision to start production of Netflix's first series, "House of Cards". The amount invested was 100 million dollars, and the series turned out to be a phenomenon! In the face of this data (sic!) it should rather be called "House of Data".
In addition to facilitating business decisions, predictive marketing can therefore result in increased sales by offering customers the right products at the right time and place, as well as improving the effectiveness and reach of the marketing campaign. Personalised advertising or a targeted newsletter will have a better impact on your purchasing decision if they are preceded by an in-depth analysis of your customer profile. The brand will be associated with the brand for a longer time, if it feels that it is treated in an individual and unique way, because the brand knows it at least as well as Mrs. Zosia from Zieleniak under the block of flats.
Predictive marketing is increasingly used in performance marketing activities.
Thanks to more and more accurate data, advertisements become more precise and effective. As a result, advertising budgets will be able to be invested more wisely in order to achieve the largest ROI. Big Data allows you to build user profiles based on their online behavior on desktop or mobile devices. An exemplary profile can be a young couple with a child planning to buy an apartment, interested in travel and design. We direct a dedicated advertising message at the right place, at the right time and in the right form to the profiles so built and structured.
The inevitable future in everyday life and business
Foresighted marketing revolutionises the relationship between consumer and brand through features such as lists of recommended products, profile-based suggestions, castomised affiliate links and personalized messages.
The development of predictive marketing is influenced by various factors, such as: cognitive science, development of artificial intelligence and machine learning, i.e. the ability of machines to learn and communicate in natural language. There are many indications that it will soon be ubiquitous: in our smart homes, watches, clothes or cars. Skillful use of this technology will undoubtedly bring profits for online and, over time, offline business.