The State of Predictive Marketing for Dealerships – Can You Really Know Their Next Move?

Could it be true, a crystal ball through which companies can know their customers’ and prospects’ next move? It may not be here yet, but many marketing professionals are banking that predictive analytics could turn into just that. The thing is “predictive analytics” or “predictive marketing” is really just solutions that activate the data insights companies have had access to all along.

A study published by Forbes titled “The Predictive Journey” said, “Predictive marketing is emerging as the best strategy to embrace data analytics to guide decisions and increase the visibility of markets.” According to the study, published in November of 2015, 83% of executives planned on increasing the role of predictive marketing over the coming year. Plus, 28% of early-stage organizations, defined as those “piloting experimenting or launching their first efforts,” planned to implement predictive processes within the coming 6 months.

What’s the allure?

The obvious draw of predictive marketing is increasing ROI on marketing spend –  a measurement that 86% of executives surveyed by Forbes were already experiencing. Beyond tangible benefits such as revenue added to the bottom line, many companies with mature predictive marketing strategies report experiencing more holistic successes such as increased customer satisfaction thanks to the ability to send more relevant communications at opportune moments. In fact, 41% of Forbes’ respondents use improved customer retention as the key metric on which to grade their predictive strategies.

If the benefits are so high, why isn’t every company using the strategy? Well, perfecting the perfect balance of data and action takes time. Key challenges cited by respondents include accurately measuring campaign results (58%), identifying the necessary data (52%), and making data actionable for business results (51%) among others. In order to get started addressing these challenges companies first need to integrate and cleanse their internal data. Insights based on inaccurate data may be actionable, but will do more harm than good to campaign ROI. Third party data is often necessary to construct a 360-view of the customer to derive predictive insights. Identifying datasets that marketers may not have realized were affecting their consumers and prospects will help to properly target and segment groups.

More than just marketing

Marketers aren’t the only ones using Big Data and predictive analytics to change the game in their industry. Sports leagues are using the large amounts of data produced by their players to train smarter and improve chances against competitors, freight companies are using predictive strategies to improve routes, and healthcare professionals are using predictive analytics to improve readmission rates.

While predictive marketing itself isn’t new, the ability to feed in so many diverse data sets and highly specialized predictive solutions are taking insights to the next level. In order to remain competitive companies must “implement predictive marketing strategies” to their growing list of data-driven to do’s.

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