The Marketing Strategist:
ITSMA Featured Research: Why Marketers Don't Use Predictive Modeling
August 15, 2013
In marketing, as in life, there are many buttons you can push. Wouldn’t it be great to know which one leads to the result you want? That’s the promise of predictive modeling.
Establish a chain of causality between the activities you can control and the outcomes that senior management wants. Invest in three webinars; get 80 qualified leads and six sales. Invest in a customer loyalty program and reduce churn by 20%. Predictive models allow you to build a body of knowledge about what works—and use that knowledge to direct your spending wisely.
But most marketers don’t use them. Only 30% use data and analytics as a predictive tool (and another 14% don’t even use analytics), according to the 2013 ITSMA/VEM/Forrester Marketing Performance Management Survey
. About half use data and analytics to refine the marketing mix; less than half use them to predict campaign effectiveness; and only a third have attempted to predict customer behavior.
Given the value of predictive modeling, why isn’t it more prevalent among marketers? The reasons range from lack of know-how and tools to the paucity of good inputs. But a key reason is the siloed nature of marketing data at most marketing organizations. According to the survey, about half of all marketing dashboards use data locked up in PowerPoint and/or Excel (see Exhibit 1). It’s easy to blue-sky a chain of cause and effect linking business outcomes to variables ranging from press mentions to highly targeted campaigns. But the need to gather, validate, normalize, and clean the data is a task that will stop many predictive modelers before they even start.
Compared to departments like finance and operations, marketing is late to the data, analytics, and predictive modeling game. It’s likely that data wrangling expertise already exists in your company. Find out where that knowledge resides is and take advantage of it.
Exhibit 1: PowerPoint and Excel Are the Primary Tools for Marketing Dashboards