5 ways to use predictive insights to get the most out of your data

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For several years, experts have been saying that data is more valuable than oil. But are companies really getting the most out of their data? What are some of the hidden costs of collecting and storing data, and how can businesses get the most out of their data?

data storms

Businesses today are faced with an enormous amount of data. Collecting, storing, and securing this data in a data warehouse or data lake comes at a high cost. The pandemic has exacerbated the problem by spurring digital transformation and moving the entire buyer journey process online. This movement has prompted many companies to redouble their efforts to collect data to make sense of a changing world.

But the data itself has no value. It's only useful when you can use it to understand a changing world and capitalize on those changes to improve your business performance, such as increasing revenue growth, gaining a competitive advantage, or raising the bar. operational excellence.

An organization may have a bunch of bricks of gold, but if it has no way to turn the gold into cash flow, that gold is essentially worthless. This is the challenge that many organizations are currently facing when it comes to data. Many companies are sitting on a gold mine of data. But they have no way to turn it into valuable, forecast-based insights that could inform the many "million dollar" decisions and actions that revenue teams make every day.

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By prediction-based information, I mean the type of probabilistic information derived from algorithms that can help guide day-to-day actions and predict what is very likely to happen in the future, and most importantly, have a disproportionate impact on the results. . Today, most companies analyze their marketing data by focusing on the past: what did this segment of people do in the last quarter or the same period last year? But to move from historical analysis to prediction-based intelligence, the underlying question needs to be reframed as: Which specific individuals are most likely to do something in the future?

Predictive insights: using data to anticipate

This shift to a predictive mindset offers a marketer a lot of work and lots of possible insights. They could create a personalized offer to influence customer behavior to change course or act sooner. They can also create much more specific lookalike audiences, making their targeting more precise, or expand audiences in highly strategic ways by focusing on lookalikes of future high-value customers. Another option is to predict which customers are likely to churn and take steps to try to retain them before they leave. Even a small increase in customer retention can give a dramatic boost to profits.

Let's say you're a large D2C lifestyle subscription brand that spends millions of dollars a month on acquisition campaigns. You're also likely offering your potential new customers deep discounts on their first order, and maybe even their second and third orders, to really hook them in the long run. These acquisition costs can be substantial and eat into margins. These types of promotions are often driven by an established heuristic or business intelligence (BI) rule.

For example, the rule may require that every VIP customer be offered a promotion. But, in doing so, it extends the promotions to those who would buy again without the promotion - and also...