Predictive marketing 101: What is it and how to utilize it

If you’ve ever played a game of chess, you can appreciate that at the core of a good game is an excellent strategy. No matter if you’re a beginner or an advanced player, you most likely have some kind of plan on how to approach each game. 

You look at every piece on the board, consider their strengths and how you can use them to your advantage. But most importantly, you look at what moves your opponent can potentially make, how you can capitalize on them to bring home a win.

Predictive marketing is a lot like that. You need to have a strong strategy in place and try to predict what moves or actions customers will make so that you can guide them in the direction you want them to go.  

Let’s break down all the essentials of predictive marketing and how you can leverage it to strengthen your campaign success. 

Predictive marketing helps brands: 

There are two main tools you will need to get started on creating predictive marketing models: 

The data you collect on your customers is critical in helping you determine how to target them and what their future actions might be. Using a customer data platform (CDP) will help you collect a wide range of information such as:  

All this data comes together in a CDP to create detailed customer profiles that allow brands to better understand their customers on a more personal level so they can better predict how to segment them effectively. 

In the past, many brands focused on demographic data only. Take a look at the demographic data collected on two people with no other context:  

A lot of buzz has been created around generative AI – and with good reason. It uses algorithms to instantly create anything from text, images, voice overs and more – mimicking human creation. Gen AI can play a major role in improving how businesses segment their customers and how they communicate with customers.  

For example, Gen AI chatbots can enable conversational, human-like and personalized conversations with customers by using contextual information from their CDP profile.

Using these two tools in unison will enable brands to accurately predict what their customers are looking for, and easily generate interactions with them on various messaging channels.  

If you’ve ever searched for a topic or product and then suddenly start to notice related advertisements appearing on your social media, that’s one tried and true way brands are using predictive marketing.

These models help predict what products you might be interested in based on how you’ve interacted with brands in the past. Brands can target segmented audiences on various channels, from social media to email campaigns, depending on the customers’ preferences.

It’s well known that acquiring new customers is much more expensive than retaining your existing customers. If you can accurately forecast who is on the brink of churning, you can hone in on that specific customer segment and launch marketing efforts that can help boost loyalty and retention.  

Do you know what your customers’ next move will be? Or what path of the customer journey will they take? Understanding and accurately predicting their actions can help brands improve experiences by giving customers exactly what they are looking for. 

Predictive lead scoring helps brands focus their resources and efforts on their most promising leads. Brands are able to determine the likelihood of a lead converting and avoid overspending on campaigns with no return. 

Since generative AI and CDPs must process large amounts of data, privacy and security can become a concern. It’s important that your solution provider is equipped to implement data privacy and security measures to protect your customers. 

High-quality data is essential for generative AI models to produce quality interactions for customers. Consolidating data from various sources through CDPs can enhance data quality. However, it is crucial that data you are using is high-quality and accurate for the training and operation of your generative AI model. 

Generative AI models reflect a lot of characteristics of the people who train them – which means they carry the risk of reflecting a bias. Using a variety of techniques such as adversarial training can help counter that risk. Adversarial training involves purposefully trying to trick your gen AI algorithm by feeding it data that will likely give a poor or problematic output. This way, you can train your tools to avoid biases and give more accurate and realistic communication.

Integrating generative AI models and CDPs can be very complex and challenging. Having an experienced solution provider help with the integration process can enable you to go to market faster and with less hiccups. 

Even if you are just starting to become curious about predictive marketing and how it can benefit your business, it’s important to keep one eye ahead and understand where this is headed in the future.  

Generative AI and CDPs can be used to create new use cases that are specific to your industry and customer base. Don’t limit yourself to what is already out there. Take advantage of tailoring your gen AI models with customer data to create unique use cases that help you stand out.  

Low-code or no-code solutions are becoming increasingly popular. You no longer need to be a coding expert to offer elevated experiences to customers. This enables a wider range of businesses more accessibility to gen AI solutions. 

Generative AI and CDPs are powerful in combination. But more and more businesses are integrating the two with other solutions as well. From marketing automation platforms, customer relationship management (CRM) systems, and enterprise resource planning (ERP) systems, this trend is allowing businesses to create a more unified look at their journey and customer base and offer even better experiences. 

Utilizing gen AI and CDPs for predictive marketing will give you a competitive advantage with customers. Boost engagement and ROI, reduce ad spend and provide customers with 24/7 communication by automating and personalizing interactions across the board.

These tools are the future of marketing in a digital world. Stay ahead and learn more about how gen AI can help you reach your business goals.