What is Predictive Marketing Automation?
Predictive Marketing Automation (PMA) is state of the art machine intelligence applied to solving marketing problems. PMA begins with an intelligently designed database to identify key changes in individual customer behavior and lifetime value in real time.
However, a PMA platform does more than just utilize predictive analytics to formulate marketing opportunities. It actually bridges the gap between insight and action to use predictive analytics for marketing automation– utilizing data to target and deliver only the most relevant messages/experiences to individuals showing the highest potential for spending (or risk of decaying value) at any given time.
The end goal – and ensuing result – is simply, the maximization of profit volume.
In fact, not only does Predictive Marketing Automation outperform other well-known, commonly used platforms, a modern PMA transcends their entire scope of capabilities combined.
As knowledge of this emerging versatile tool spreads, it will surpass – and eventually outlast – all that came before.
The Evolution of Marketing Platforms
With technology perpetually evolving, only the most adaptive, useful, and efficient software manage to achieve sustained success while maintaining relevance.
Ultimately, when a new platform emerges and proceeds to eclipse the competition, the rest are not simply rendered dated –they grow obsolete.
This is comparable to the natural world – in which a particular species becomes extinct after it is dramatically outcompeted by another. In the wild, the noncompetitive eventually become nonexistent. The same set of rules applies to technology.
PMA is the natural evolutionary progression of marketing platforms – going beyond consolidations, data summarization, insights, and machine intelligence to the ever more seamless execution of the most valuable touches at the ideal time.
A strong PMA platform also observes response and folds its learnings over time – improving its targeting and tailoring capabilities on its own.
Platforms of the Present
With a plethora of marketing platform names and labels like CRM, CDP, ESP, DMP, etc., identifying and understanding each of their respective capabilities can be – to say the least – a convoluted process.
At a certain point, viewing and comprehending a list of all these ‘acronyms’ can seem like staring into a bowl of alphabet soup – where each term begins to blend among the others like an indiscernible jumble.
This is especially the case with overlapping functions across separate platforms, as well as frequently exaggerated claims by developers.
Overall, this can create confusion and initiate a wide range of possible misunderstandings.
The following is a breakdown of the capacities of a few prominent digital marketing tools today – Email Service Provider (ESP), Customer Relationship Management (CRM), and Customer Data Platform (CDP) – in relation to those of a PMA.
ESP (Email Service Provider)
An ESP is a platform whose basic functionalities include creating email templates while utilizing send engines to distribute emails to subscriber lists. Essentially, they are designed to deliver sets of messages to a large base of subscribers.
While ESPs perform their basic functions well, a major limitation is that their capabilities do not extend beyond sending out messages. Even those equipped to store data cannot do so as efficiently as a PMA.
Two key points:
- An ESP’s core function is simply to send out bulk groups of emails (batch and blast) – nothing more.
- The more mail sent out, the more expensive the software.
The latter does not constitute a recipe for success. Sending out more generalized messages to more people (instead of data-driven, personalized messages) does not result in more sales.
In fact – if not targeted and deployed properly – this practice of traditional “batch and blast” messaging will likely turn off a large portion of both your current and potential customer base.
Why? Because this is the age of one-to-one marketing. If consumers are getting too many impersonal messages too often, they will likely veer away from your product and turn towards another that knows when and how to capitalize on their (often fickle) attention spans.
CRM (Customer Relationship Management)
Like a PMA, a CRM utilizes data to form customer profiles that develop stronger connections with consumers. One of its greatest strengths is its ability to capture user input and compile unstructured data in order to drive customer retention and increase sales. They are able to capture user data, consolidate qualitative experiences, and organize them in a way that best describes the customer experience (CX).
For instance, a CRM can track and list a range of customer experiences/engagements – such as when they enter a store, access a website, or click an ad on social media.
However, CRMs are still deficient in a number of areas compared to a PMA.
- Lack of a core database model utilized in predictive analytics.
- Not designed to filter enormous quantities of data from so many sources.
- Limit in the amount of detail of ingested data.
- No advanced identity matching capabilities across channels.
- Restricting outside access to internal databases.
Essentially, CRMs work well for targeted tasks within specific channels, but lack the depth and versatility to fully manage modern customer data like a PMA.
CDP (Customer Data Platform)
A Customer Data Platform software is a web-based interface that consists of three core components – a database, the ability to connect to multiple channels, and a marketer-friendly interface – that help drive marketing and sales initiatives.
In the past, CDPs were traditionally custom databases for marketers – whereas nowadays they are more cloud-based.
The goal of a CDP is to organize and unify customer databases. What separates a CDP from a CRM is the fact it can identify any customer beyond your database – whether they are known or unknown.
In addition, a CDP extends beyond customer interactions and gathers more information about calls, emails, purchases, etc.
After that point, however, the work stops. This is because:
- A CDP doesn’t actually deliver messages on its own.
- A CDP’s main function is to y data. It is not directly actionable and requires requires “piggybacking” onto other platforms/software in order to do so.
PMA – The Platform of the Future
As evidenced, there are a number of explicit distinctions that set a PMA apart from the other platforms listed above.
While CRMs, ESPs, and CDPs were all designed with similar objectives in mind (and even perform some of a PMA’s functions), none employ a firmer, more comprehensive grasp of the Buyer Lifecycle (BLC) and a true 360-degree customer view.
With a PMA, every possible function is tied together in one singular package. There is no need to integrate, assimilate, or “piggyback” onto anything else. This simplifies the process while generating more palpable, powerful results.
In addition, other platforms lack the predictive intelligence that a PMA possesses and deploys. At best, they consist of old-fashioned triggers with simple, rules-based logic that cannot produce inherently actionable insights.
Meanwhile, a PMA covers the entire process all the way through to profit – delivering real, tangible revenues.
One of a PMA’s key functions, predictive analytics is gaining momentum as the size, scope, and variety of Big Data continue to increase.
By definition, Predictive Analytics is the utilization of data, statistical models and machine learning in order to gauge the probability of future results. Its insights are derived from historical, demographic, and other behavioral data (both online and offline).
Therefore, not only can a PMA consolidate, unify, and clarify unstructured omnichannel data, it renders it useful by building models that produce actionable answers to relevant questions.
A few examples of such questions include:
- Who will be a valuable customer in the future?
- “When will my customer make a another purchase?”
- “What new kind of product or category could they branch out towards next?”
Obtaining the most accurate answers to questions like these is similar to molding a set of keys. Each key can be used to unlock more doors into the minds of your buyers – revealing a clearer view of their respective tendencies and inclinations.
This practice creates a whole new landscape of possibilities previously unseen and/or unknown (by both your company and your competition).
Forecasting Buyer Behavior
At its core, marketing is all about getting to know people – specifically your buyers.
For instance, all retailers deal with loyal and valuable buyers as well as one-and-done bargain seekers. The latter are undesirables. Without a doubt, attracting the most loyal and valuable buyers (Most Valuable Buyers, or MVBs) who not only come back, but continue to buy again over a long period – is the key component of true retail success.
With predictive analytics, a PMA helps to:
- Procure high-potential customers, or Most Valuable Buyers (MVBs), which generally drive 75-80% of a company’s profits – despite making up only roughly 15-20% of its total customer base.
- Use predictive modeling to retain those MVBs and procure more out there who are just like them.
This is accomplished by constructing models that calculate a scores to define highly refined targets before taking action (The B2B world also utilizes this same process in Marketing Automation via Predictive Lead Scoring). This is done perpetually in real time – every second of every day.
Full Stack Automation
Another key highlight of a PMA is automation. This allows marketers to synchronize, streamline, and execute omnichannel marketing campaigns from a single, centralized apparatus automatically through machine intelligence.
These days, the process of simply identifying and understanding the past, present, and future browsing/buying habits of your current and potential customer base is insufficient. In order to initiate a sale, that knowledge must transform into insights that are actionable.
A PMA’s automation capacities allow marketers to reach the right customer, at the right time, on the right channel, with the right message. With all of the bases covered, this constitutes full stack automation – where the system is consistently fed new predictive information that has both material and monetary value.
In fact, the system predicts and detects peak changes in either the behavior or lifetime potential value of a customer as they transpire in real time. This enhances customer engagement, maximizes overall Customer Lifetime Value (CLTV) and increases sales.
Windows of Opportunity
There are particular points along each customer’s respective buyer lifecycle where precious windows of opportunity open. This is where the likelihood of a sale significantly spikes, and marketers must strike while the iron is hot.
The best part of PMA automation is that most of its functions are preset into the software itself – negating the necessity for the seemingly insurmountable degree of manual functions it would take to track each customer’s position along the customer journey at any given time. This is achieved through cutting edge, data driven, machine intelligence.
In many cases, this type of advanced, personalized automation can make all the difference between winning or losing a customer.
This is extremely critical – because once a buyer loses interest and decides to move on, you’ll have to fight twice as hard to win them back.
The Germination of PMA
Without a doubt, PMA represents the next evolutionary phase in digital marketing. In fact, many large, established marketing companies recognize this, and are already merging together in order to acquire and incorporate PMA elements into their existing software.
However, this type of reverse integration process comes with three critical downsides:
- Less flexibility than an organically-developed PMA.
- Higher costs for setup and implementation.
- Substantially lower time-to-value ratio.
This leads to a key question for marketers: Would you rather conduct business with an older platform that has been patched up and added onto (like renovating an old building or repairing a used car) or a new, innovative one that stitched and molded together the needs of customers organically and independently?
The utility of today’s popular marketing platforms is steadily declining. They are becoming outmoded and outdated. Through the natural progression of technology, marketing platforms are becoming increasingly more agile and able to handle more complex tasks.
A PMA represents the true evolution of all preceding platforms. It is a superset of all of the technology and capabilities found in an ESP, CRM, and CDP. Frankly, it does not just match their functions, it supersedes them – maximizing the power of your data assets and putting your business in the best position to succeed.
Again, this is the age of one-to-one marketing, where reaching buyers on a personal level via the proper channel is more crucial to than ever.
Equipped with valuable information about each individual buyer’s interests, inclinations, and locations along the customer journey, PMAs are autonomous decision-making tools that develop and deliver carefully targeted, personalized conversations to anyone, across any channel, at anytime.
BuyerGenomics is an example of a premier PMA. As a marketing pioneer and thought leader, we ultimately leapfrogged the rest of the field.
This was achieved through a steadfast commitment to uncovering the source of insight it takes to design and run a truly modern, cutting edge platform.
It is precisely this kind of frictionless connectivity that weaves together the entire CX and maximizes both ROI and sales capacity in the simplest, yet most sophisticated way possible.
At BuyerGenomics, a well-educated client is our best customer, and we’ve poured our experience and resources into this piece to that end. If you picked up even one or two new insights, you’ve succeeded today.