When the opening ceremonies of the 2014 Winter Olympics aired, my wife and I were dancing through the streets of New Orleans as part of the “2nd Line” in my friend’s wedding. The 1st line included the bride, groom, and an 8 piece jazz band, and the 2nd line was everyone else marching behind to the beat of many drums. Needless to say, we made quite a scene along Bourbon Street and it was the highlight of my trip for sure.
On my flight home I started to get excited to watch the Olympics in the coming weeks. Eight fellow Dartmouth alumni and my friend’s sister are competing this year, so I’ll have plenty to cheer about.
I don’t know about you, but I don’t follow most of the winter Olympic events like skiing, bobsledding, figure skating, ski jumping, curling, or aerials, except for the actual Olympics every 4 years. That means I have no idea who are the favorites going into these events. But it wouldn’t take long to figure out with a little bit of research.
Predicting Who Will Win Gold
Bear with me a minute and I promise I’ll tie this all back to improving your online marketing. :)
How could you determine who is most likely going to win any of the Olympic events in Sochi? What data would you need?
Let’s use figure skating since that’s one of the more popular events. If you wanted to predict the women’s gold medalist in figure skating this year, then what would you research?
Well, you would obviously want to look at past performance right? How did each of the women compete over the past year? That should give you a strong indication about how they will perform in Sochi. Sure, the pressure of the Olympics may cause some to under-perform, and others may rise to the occasion, but our best bet is to look at previous competitions and use that to predict future results.
But what about athletes that may have peaked too early, or others who look like they’ll peak during the Olympics? Clearly, the timing of the competitions should play a factor in our predictions. The athletes who won big competitions more recently are much more likely to also win the Olympics because they are on top of their game. Athletes that won early in the year, but trailed off may have unfortunately peaked too early.
How can you use this same analysis to improve your online marketing?
Predicting Who Will Buy Your Products and Services
OK, now that we know how to predict gold medalists, let’s turn our focus to your prospects and customers. Out of everyone who visits your website, who is more likely to buy your product or service? Is there any way to confidently predict this behavior?
Believe it or not, the analysis is not much different than predicting gold medalists. All we need to do is look at past behavior.
If you’re marketing to past customers to generate repeat purchases, it should be pretty obvious which ones are more likely to buy from you again. Is it the customers who last purchased from you 2 years ago, or 2 months ago? Probably the more recent customers, right? The older customers already “peaked” so they’ll be less responsive to any of your offers.
The same is true with prospects. A prospect who requested a quote 1 week ago is more likely to buy from you than a prospect who called 1 year ago. In other words, we can use recency data like date of last purchase or date of last inquiry to predict the likelihood of a future purchase.
Predicting buying behavior is nice, but how can we use this information to improve marketing return on investment (ROI)?
Customize Your Offers to Match Recent Activity Data
If we know who is more likely to buy, then we can customize our offers to maximize ROI.
For example, if we’re marketing to the prospects and customers who we haven’t heard from in a while, we’ll use more marketing firepower (via higher discounts and more free bonuses).
Alternatively, the prospects and customers who look like they are “peaking” right now probably don’t need such high discounts or free bonuses. They’re on track to buy anyway so those extra discounts and bonuses are a waste of money.
Now can you see how matching your offers based on the date of recent activity can maximize your ROI? All you have to do is segment your prospects and customers using recent activity like purchases, website contact forms, phone calls, or even website visits, and then match the strength of your offer relative to the likelihood of a future purchase.