It seems not that long ago that Marketing was tasked with operating as a profitable business unit. With that came “Dashboard Mania”…essentially marketing’s response to executive calls to exhibit ROI.
We have all worked hard to build the supporting data model as well as visual output to prove our existence to the organization. Now – just as we are starting to figure this out and begin to think we can put it in cruise control for at least a year, our fearless leaders not only want us to prove ROI on what we have done but literally create a crystal ball to prove future ROI on what we are going to do!
Predictive analytics is simply our ability to identify where changes in certain variables will affect other variables. More formally, predictive analytics represents our ability to demonstrate strong correlation between a dependent variable and its list of predictor(s). Sport books have been doing this for years – they have massive servers which literally crunch thousands of dependent and predictor variables to shoot out the score of a football game. If it rains, and the 49ers are at home and the QB is less than 25 years old and the visiting team is from east of the Mississippi, then there is a 65% chance that they will win the game outright.
My research into predictive analytics within marketing led me to a space filled with credit card companies, insurance companies and other B2C financial institutions. It makes total sense given their business model is better suited to the art than say an enterprise B2B software company where coupon offers to increase customer retention is a little harder to execute J.
This being said, once digging a little deeper, predictive analytics can and should be alive and kicking in the B2B space. A logical area of highest impact can be found within the alignment of our organizations sales and marketing departments.
Sales & Marketing Alignment: CRM Adoption
Lets face it – we all, in some form or another, are hamstrung by the fact that our data layer (primarily CRM) is reliant on a sales force which is time constrained and simply not wired well to maintain. The net result is that we are strapped with this handicap thru our campaign planning, execution and metric gathering efforts.
Now – let’s consider how predictive analytics may change this equation. What if an account executive was told that if he/she maintains these 6 data points on their contacts (monthly) – then we will have an engine which will guarantee them more $$ per hour spent on account acquisition and management.
In other words, “John Doe, you maintain these 6 fields monthly, it will take you an extra 10 minutes per month (per contact), the result of this is that we can guarantee you an increase in 25% closure rate with the leads we give you which results in additional commission of $45,000 per year for you based on our average sales price.
This may be the holy grail that FINALLY drives the symbiotic relationship of sales and marketing data to fruition.
Sales & Marketing Alignment: Funnel Forecasts & Campaign Planning
Our sales funnels are no longer a function of opportunity pipeline within our CRM systems. As sales & marketing alignment as become part of the DNA of best in class organizations, funnels are now a shared entity for both departments starting with sales stages far before a contact becomes an opportunity.
Thru the use of BI tools, we can accurately represent the conversion rates and velocity thru these lead stages whereby providing a more predictive view of the actual revenue – farther out in time.
More interestingly is that thru the use of correlative tools, we can also understand the influence of campaign types on users moving thru lead stages. With this data in hand, we have a powerful tool in our campaign planning process. By looking at bottlenecks in our funnel and understanding what campaign types drive conversion, we can predict the success of our campaigns and ultimately map our campaign investments better.
In summary, I hope that this blog entry has provoked greater thinking around predictive analytics particularly within the alignment of our sales & marketing efforts.
Part two of this entry will focus on predictive analytics and its ability to help our organizations drive customer loyalty and ultimately shareholder value.
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