Predictive Analytics in Email Marketing — A Key to Selling Smarter and Selling More
The use of predictive analytics in email marketing isn’t new. But it’s a hot topic today — especially for e-commerce businesses — because predictive marketing is proving to be a great way to sell smarter and sell more through the email channel. This article is the first in a series of three NewsLever features that will discuss how to effectively and profitably apply predictive analytics to your email-marketing program.
What Is Predictive Marketing?
“Predictive marketing is the practice of extracting information from existing customer datasets to determine a pattern and predict future outcomes and trends,” as defined in The 2015 State of Predictive Marketing Report
In other words, predictive marketing can help you make smarter decisions based on actual customer behaviors. When applied to email marketing, predictive analytics helps target the right audience, boost engagement, drive more conversions, and increase revenue from your email campaigns.
The Use of Predictive Analytics in Marketing Is on the Rise
Although predictive analytics has been applied to marketing for some time, the following factors explain why its use by marketers is rapidly rising:
- Easier access to vast amounts of customer data
- Availability of new automation tools
- Development of more sophisticated algorithms
- Improved computing power thanks to the Cloud.
How many marketers use predictive analytics? Results from the 2015 State of Predictive Marketing Report give a good indication:
- 47% of survey respondents stated that they were aware of predictive marketing and were currently investigating how to use it.
- 25% of respondents reported that they were currently using some predictive tools.
- 24% of respondents said that they didn’t use predictive marketing and that the concept was new to them.
- 68% of respondents said that they believed predictive marketing would be a key piece of their marketing stack moving forward.
And when it comes to predictive analytics, a company’s size doesn’t necessarily correlate with the use of more advanced marketing techniques:
- 49% of super-small companies and startups reported that they were currently investigating predictive marketing solutions.
- 33% of small businesses reported that they were currently investigating predictive marketing solutions.
- 20% of medium businesses reported that they were currently investigating predictive marketing solutions.
- 36% of large businesses were fully committed to predictive marketing.
How to Use Predictive Analytics in Email Marketing
In terms of email marketing, predictive analytics leverages a company’s current email service provider and combines real-time behavior recognition with historical customer data to create automated, personalized email campaigns. It can be used throughout the customer lifecycle, from acquisition and relationship building to retention and win-back campaigns.
Here are some ways that predictive analysis can be used to improve your email-marketing campaign strategies:
- Acquiring New Customers — Send emails that convert more prospects into customers. When prospects first sign up to get promotional emails from a company, they’ll typically get a welcome email series aimed at encouraging them to make a purchase. Likely, all new subscribers get sent the same welcome email series and, in some cases, a standard promotional offer.
By applying predictive analytics to behavioral and demographic data, you can segment prospects — testing various messages and offers — to create a more personalized and relevant email series that drives conversions and increases revenue.
- Building Relationships to Retain Customers — Send emails that engage individual customers. Product recommendations are one of the most important ways that predictive analytics can help to engage and retain customers. By using such information as products that customers have already purchased and products that they’ve browsed at your website, and incorporating other variables (e.g., age, gender, order amount, etc.), you can predict what products they’ll be interested in purchasing in the future. And using this information, you can target email content and offers that you send to individual customers.
At FulcrumTech, we leveraged historical purchase behavior across one client’s broader market to uncover products that were typically purchased together. Using this information, we crafted a post-purchase campaign for new customers that showcased the most popular accessories typically purchased with the technology item(s) they bought. Thanks to this email campaign, the client’s post-purchase revenue increased by 483% in just two months.
You can also use predictive analytics to determine how often customers make purchases so that you can find the optimum cadence and frequency to send them emails about your products.
- Winning Back Customers — Reengage customers who haven’t purchased from you in a while. When it comes to win-back email campaigns, a standard “we miss you” message often is sent to all customers after a certain amount of time has elapsed since they last made a purchase. Predictive analytics can help you create more personalized win-back emails, as well as determine the best interval of time to send them and the most cost-effective discount level needed to motivate a customer to make another purchase from your company.
Using technologies that have a basis in data-driven science, such as predictive marketing, is a key way for marketers to gain more insight to their target audiences and, ultimately, apply a more strategic approach to their email-marketing campaigns.
FulcrumTech can help you leverage predictive marketing technology in your email-marketing efforts to get more qualified prospects into your sales funnel and fast-track them through it. Contact us and get started today!
And be sure to check out Mitch’s latest blog entry for information about some of the companies offering technologies that help power the use of predictive analytics in email marketing today.
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- Are You Using All the Data You Should to Get the Best ROI for Your Email Marketing?
- 7 Easy Tips to Radically Improve Your Email-Marketing Results Today