By now, you know that marketers have unprecedented access to customer information and data through various inbound marketing strategies. Savvy marketers use that data in a number of interesting ways, all with the goal of maximizing the potential return on investment of their team’s marketing efforts.
Predictive marketing and demand generation are two such strategies. Both are fairly new concepts to the marketing world, having only developed since the rise of the internet introduced a new era of digital marketing. Yet, their impact is undeniable by any marketer that has incorporated them into an overall marketing plan.
Separately, the two strategies help businesses leverage customer data to boost the ROI of your marketing efforts. That might mean higher conversions, increased deal sizes, and lower cost-per-lead rates. Together, however, the two strategies take things to a whole new level. “Predictive demand generation,” as it is called, helps you maximize the overall lifetime value of your customers.
But what exactly is predictive demand generation?
Demand generation is a full life cycle approach to marketing. Though lead generation is a critical piece of that, instead of focusing purely on top of the funnel activity, demand generation incorporates your marketing strategy into the entirety of the customer life cycle - from the moment they enter your pipeline, until long after the contract is signed.
Predictive marketing is the process of using collected lead and customer data to influence future marketing decisions. While there are any number of different use cases, this post emphasizes how predictive analytics can have a tremendous impact on maximizing the lifetime value of your customers, which is the goal of demand generation, too.
So, in short, bringing the two strategies together means leveraging existing customer data to maximize the long-term value of leads and customers already in your pipeline.
The Two Biggest Ways Predictive Demand Generation Positively Impacts Your Business
By Increasing Company Revenue
Armed with the demographic and behavioral data of existing customers, savvy marketers can make intelligent forecasts about the potential buying behavior of new customers.
Here is an example. Suppose your team recognizes a pattern in the data. When companies operating in the SaaS industry with less than 200 employees buy “X” product, there is a 47 percent chance they will purchase “Y” product from you sometime within 9-12 months of their initial purchase.
On the surface, the marketing strategy seems obvious; at the 9-month mark, start marketing to those customers with information about your “Y” product. That practice itself would likely yield higher company revenue.
However, a savvy marketer actually takes things a step further and asks an important question:
What is the difference between the 47 percent who do buy and the 53 percent who do not?
Perhaps you uncover that three-quarters of the 47 percent who buy have over six conversations with a sales representative at your company over the course of their first year as your customer.
Now, you can use that information to increase sales outreach and not only mirror the original 47 percent, but actually increase that number.
By Protecting Your Baseline
They say the best offense is a good defense and nowhere is that more true than in successful demand generation. Whereas marketing was once singularly focused on driving new leads to the sales team, demand generation focuses on the entirety of the customer life cycle. As a result, impacting company revenue can come from both generating new leads and protecting the business from unnecessary churn.
Again, this is where predictive demand generation can completely change your business. By analyzing the demographic and behavioral data of previously churned customers, demand generation marketers can identify “red flags” in their current users and have sales or customer success take action. Or, they can fully own the process themselves by moving those customers through a specific nurture campaign intended to mitigate churn.
What hurdles exist in implementing an effective predictive demand generation strategy?
The biggest potential hurdle to a successful predictive demand generation strategy is poor quality data.
Without clean, quality data to fuel your marketing plan, demand generation marketers are prone to make inaccurate predictions about customer behavior. That leads to ineffective campaigns, wasted time and resources, and potentially frustrated customers.
Quality data breaks down into three main categories:
The data is unified.
You have access to incoming customer information across a variety of channels. Without a good data management system, it is nearly impossible to bring all that data together. Collating data is a critical first step because unified customer information helps create a better picture of your incoming leads. That naturally leads to more accurate predictive analytics.
The data is clean.
“Clean” data is scrubbed of incorrect information and void of any duplicates.
The data is enriched.
In order to get a more holistic view of your target audience, use a data enrichment tool to fill in the gaps left by potential customers in lead capture forms. The enriched data helps you get all the information you need to make informed predictive demand generation plans.
ReachForce helps marketers increase revenue contribution by solving some of their toughest data management problems. We understand the challenges of results-driven marketers and provide solutions to make initiatives like marketing automation, personalization, and predictive marketing better. Whether you have an acute pain to solve today or prefer to grow your capabilities over time, ReachForce can unify, clean, and enrich prospect and customer lifecycle data in your business, and do it at your own pace.