Recent posts on this blog have explored how to use predictive analytics for your marketing campaign and to get deeper insights into your customers. Over on the ReachForce blog, you have also seen some innovative ways to think about the relationship between predictive analytics marketing and sales budget planning.
All of these creative, game-changing strategies can revolutionize the way you approach your marketing campaigns. But at the end of the day, your CFO will undoubtedly want to see a serious return on investment for the time, energy, and budget spent on making your predictive analytics marketing campaign a success.
That is where this post can help. Below are four ways that you can tangibly tie dollars to predictive analytics. You should walk away from reading this article confident in measuring and demonstrating ROI the next time you sit down for a business review with your boss. But your goal should be more than justifying predictive analytics marketing; it should be to show the value of your marketing efforts to get approval for an even bigger budget the next time around.
Predictive Analytics = Higher Conversion Rates
Let’s start with the most obvious way to demonstrate ROI: increased revenue. You might be able to get away with negative trends in any of the other categories in this article, but no CFO is going to approve more budget if there is not a clear demonstration of revenue moving up and to the right.
Luckily for you, this should be the easiest category to quantify. If you have been working with unified, clean, and complete data and enriching your data using a tool like SmartForms, you are well on your way to an easy victory in this category.
That is because clean data fed into predictive algorithms will naturally yield results that even the best marketer might not have uncovered by hand. Provided you take action that matches the analytics, you will be feeding higher quality leads directly to sales. Simultaneously, you will be appropriately nurturing prospects at earlier stages in the customer journey with the right content to push them further down the sales funnel.
How should you measure this success? Plain and simple: in cold, hard cash. B2B marketers have forever dreamed of having a concrete way to tie dollars to specific campaigns and with the rise to prominence of big data, you now have all the proof you need to directly attribute revenue to your work. Be thorough about it; CFOs love data and the more you can show exactly the impact of your campaign, the more their ears will perk up (and the better chance you will have of getting a bigger budget).
Improved Efficiency with Marketing Automation
The combination of great data management software and predictive algorithms is the marketing equivalent to putting the car on autopilot; sure, you want someone there to steer or swerve in case of an approaching semi, but generally speaking, you can relinquish control.
Improved efficiency can mean two things from an ROI perspective. If higher efficiency equals higher output, you are golden. Work smarter as your workload becomes less with predictive analytics. Find new ways to innovate and apply new strategies to the data you are accumulating.
Otherwise, the other demonstrable ROI from improved efficiency is reduced operational costs. That could mean less budget spend, but it could also mean less overhead. The last thing you want to do is implement this amazing new predictive analytics marketing strategy, only to work yourself out of a job! Keep the efficiency conversation in your favor by doubling or tripling output as a result of automation (which will inevitably impact higher revenue).
Create a Better Customer Lifetime Value
In addition to streamlining your lead generation process, predictive analytics give you unparalleled insight into your existing customer base. That means more opportunity to apply the same behavioral profiling and lookalike targeting strategies used to monitor lead progress through the customer journey to your current clients.
All of a sudden, you are looking at two different, but equally valuable, revenue streams: new business and upsell growth. The marketing term or growing your existing book through predictive analytics is collaborative filtering and potentially takes place at several different stages of the post-sale process.
There is the ability to upsell at the time of initial contract signing or renewal by offering better deals on larger bundles.
There are cross-selling opportunities where predictive algorithms determine a new client might benefit from an altogether different product or service of yours in addition to the one just purchased.
Then there is upsell later on in the customer lifecycle. Big data can tell you when a customer is approaching the point where other customers have considered upgrading, giving your salespeople an open door to engage.
All three channels lead to more revenue that otherwise may have gone untouched if not for the power of predictive analytics. That is ROI at it’s finest.
Reduce Churn and Mitigate Revenue Loss
Alongside identifying growth potential with your existing clients, predictive analytics shine a light on potential churn risk clients as well. The best offense is a good defense and if you can reduce company churn by leveraging historical data of previous churn customers to look for warning signs in your current customer base, you are proactively mitigating a potential loss of revenue for the company. Considering it costs significantly more to bring in new business than it does to retain your clients, any CFO will be pleased to recognize churn reduction as a demonstration of some serious ROI.
Of course, the first step in proving ROI is making sure you have the right data to even begin the process of predictive analytics marketing. That is where SmartForms can help. To learn more about how ReachForce SmartForms can help you optimize lead generation and improve your impact on revenue, sign up for a free trial and get a demo today.