Marketing automation has become a standard business practice for most B2B companies. When used properly, marketing automation provides you with information about your potential buyers and helps you optimize your communications with them. Paradoxically, a good marketing automation program make your marketing seem more human because it anticipates your buyers wants and needs and responds to actions they take with your marketing process.
Innovative companies are turning to predictive analytics to take their marketing automation to the next level. Bala Deshpande, founder of data analytics firm Simafore, defines predictive analytics as follows: "Predictive analytics refers to a collection of processes and mathematical tools which can be applied to solve some common business problems." Predictive analytics uses statistical applications to find relationships among vast amounts of data to predict future outcomes that help businesses optimize performance.
What is predictive lead scoring?
Not surprisingly, predictive analytics applications for sales and marketing are some of the most common uses of big data. The latest application of predictive analytics for sales and marketing is predictive lead scoring. According to HubSpot, "predictive lead scoring leverages both historical data as well as predictive analytics to calculate a more informed score."
Traditional lead scoring prioritizes leads by demographic factors and actions they take to prioritize their value to your company. For example, a lead that is in your target industry will be assigned more points than one that isn't. A lead that views your pricing page will be assigned a high point value because it is likely that they are considering a purchase. Lead scoring helps prioritize your leads based on two criteria:
- The lead's fit to your ideal customer profile
- The lead's level of interaction with your marketing process
Predictive lead scoring takes the process a step further by using statistical processes to analyze vast amounts of data to determine the relative value of each lead to your company. Predictive lead scoring goes beyond your marketing automation software to evaluate leads - it scrapes the web for data on your leads to predict which leads you should prioritize.
Who is using predictive lead scoring?
According to a new report from research firm SiriusDecisions, 83 percent of predictive lead-scoring product users are companies with annual revenue of less than $250 million. Predictive analytics aren't just for large enterprises, there are numerous affordable software tools and predictive analytics consultants specializing in SMB solutions.
Predictive lead scoring is no exception. Companies like Infer, Fliptop and Lattice offer "out-of-the-box" predicitive lead scoring software and consultants like SimaFore develop custom predictive analytics apps for their customers using platforms like RapidMiner.
While predictive analytics is commonly used by enterprise companies, SMB companies that employee predictive analtyics to lead scoring and other key business functions can get a real jump on the competition.
Other uses of predictive analytics in SMB marketing
I asked SimaFore's Bala Deshpande how their SMB customers are using predictive analytics to maximize revenue:
"Probably the most common application is demand forecasting. This is because every business has historical sales data of some sort and for small businesses, growing the top line is a matter of survival. Another critical application is customer retention: retaining existing customers is many times cheaper than acquiring new ones. A third area (important for new businesses) is identifying which prospect groups are most likely to adopt their products or services so that the precious marketing dollars can be spent on the most promising ones."
Regardless of how big or small your company is, data analytics applications like predictive lead scoring can make a big difference in your business performance. Where's the best place to start? Understand which business processes have the biggest impact on your business performance and identify the data you need to analyze them. A predictive analytics consultant specializing in SMBs can help you identify how you can use predictive analytics at your company. It's best to start with a plan before you buy any software. It's highly likely that predictive analytics can improve your business.