Are you leveraging predictive analytics technology? If not, get ready. It is the next big thing that will propel your business--and in many respects it is already here.
Predictive analytics is the use of statistics, machine learning, data mining, and modeling to analyze current and historical facts to make predictions about future events. Said another way, it gives mere mortals the ability to predict the future like Nostradamus or Carnac the Magnificent (but without funny hats).
The science of predictive analytics does have critics. Gary King, a professor at the Institute for Quantitative Social Science at Harvard, believes that "statistical prediction is only valid in sterile laboratory conditions," because the number of environmental variables and human responses to those variables is inherently unpredictable. Nevertheless, predictive analytics is increasingly proving its worth in business: There is measurable traction that results from using the exhaustive study of patterns and activities from the past to support and influence consumers' future decision-making and buying behaviors.
Whether you love it or hate it, predictive analytics has already helped elect presidents, discover new energy sources, score consumer credit, assess health risks, detect fraud and target prospective buyers. It is here to stay, and technology advances ranging from faster hardware to software that analyzes increasingly vast quantities of data are making the use of predictive analytics more creative and efficient than ever before.
I would argue that the most valuable use of predictive analytics is in marketing and sales. Imagine the ability to accurately predict not only who your best leads and prospects will be, but when and how will be the most effective ways to reach them and then to engage. This ability alone will empower marketers and salespeople in the coming seasons to be radically more productive and profitable than they are today. Used properly, it can transform the science of sales forecasting from a dart-throwing exercise to a precision instrument.
The concept of sales and marketing automation has already produced some of the highest-flying success in high-tech. Companies like Salesforce.com have been wildly successful in automating the sales process for salespeople and managers. Organizations like Marketo have enriched the marketing discipline with automation and tools for lead generation, lead nurturing and lead scoring.
However, none of the automation solutions have yet resolved the all-important passing of the baton between marketing and sales. This is the hallowed ground where predictive analytics offers the greatest new potential of all.
Marketing Sales = Magic
When these sciences coalesce and align, predictive analytics can allow marketers to target the best possible prospects with the most compelling offers with surgical accuracy. It lets salespeople know how and when to communicate with those prospects based on systems that leverage every imaginable variable that impacts a customer's decision to buy. What's not to love about that?