It should come as a shock to no marketer that analytics is an essential tool for gaining customer insights and providing more targeted, contextual offers and services. It’s a topic we’ve written about frequently here at the APEX of Innovation, and a trend that is only poised to grow as Internet of Things (IoT) adoption continues. Case in point, Gartner’s CMO Spend Survey found that analytics is the most strategically important capability in supporting marketing strategies, making up an average of 16 percent of overall marketing spend.
Traditionally, the focus has been on descriptive and predictive analytics, but we expect prescriptive analytics to become an increasingly hot area of investment in 2020 and beyond. Unlike the former approaches, prescriptive analytics is directly actionable and provides marketers with a blueprint for making their campaigns as successful as possible. As a recent CMSWire article put it, “If marketers aren’t leveraging prescriptive analytics in their marketing processes, they are definitely missing major opportunities to make a positive impact on the brand’s bottom line.”
Prescriptive analytics typically takes one of the following three forms:
- Guided marketing: Drawing on advanced analytics, marketers can meet and engage with customers wherever they are in the process, develop ideal customer profiles, and identify those prospects as they search for the company in real time.
- Guided selling: In a similar vein, prescriptive analytics can be applied to the pipeline to increase win rates by recommending which deals to focus on, flagging key opportunities at risk, and enabling companies to optimize resources to focus on the deals most critical to the bottom line.
- Guided pricing: Drawing on market, competitive, internal, and customer-facing data, prescriptive analytics can provide guidance on price levels and discounts to maximize the profit margin on each transaction.
However, as Daniel Newman writes in Forbes, “Achieving the benefits of data and more specifically prescriptive analytics comes down to having the technology, systems, and processes to maximize available data.” Or, to put it another way, if you’re going to entrust your marketing decisions to an algorithm, you better be sure that the systems of record, tools, and infrastructure powering artificial intelligence (AI) decisions are up to the challenge. Read more of his thoughts on how companies can evaluate their data environment to ensure it’s able to support prescriptive analytics and other next-generation techniques.
As a recent Bain report put it, “Organizations that refine their processes to take advantage of [emerging analytics] approaches will raise the return on their sales and marketing activities.” Is your organization ready to take on prescriptive analytics and modernize its marketing campaigns?