Using Analytics to Make Smarter Decisions in a Rapidly Changing World
What if I told you that it’s possible to see the future? How would having that ability change the way you market to your customers and prospects? You’d probably be substantially more confident when it comes to planning and budgeting.
I’m here to tell you there is a way, if not to predict, at least anticipate, the trajectory of your customers and understand the future of your business. You don’t need a crystal ball or a magic elixir, you just need the right mix of data and insights; specifically, you need anticipatory analytics.
In my last article, I introduced the concept of anticipatory analytics and explained how it could have helped prevent the destruction of the Death Star in the original Star Wars movie. [Spoiler alert: the newest installment of the Star Wars franchise revealed the vulnerability in the Death Star was intentionally placed there; who could have anticipated that?]
But anticipatory is not just for the Galactic Empire. Marketers across the galaxy can use it to determine the probability of a business’s growth or decline, as well as assess change in a company’s risk profile, to make more profitable business decisions. The ability to see the future is no longer reserved for science fiction, it’s a reality that innovative companies are experiencing every day.
The traditional way we use analytics is based on history; looking at what has happened in the past to inform the future. Many times we take that historical data and build models to help forecast certain outcomes, for example, creating a model that looks at how a set of companies have responded to a campaign in the past based on a set of factors. While this type of “predictive” analytics has become a fairly common practice among many companies, especially in the marketing space, it can only tell you what might happen given the same set of circumstances – and it’s often very good at doing just that. But at the end of the day, predictive analytics assumes we’re doing business in a world that is not changing and that historical trends will repeat in the future. And we all know that is no longer a reality.
In the past fifty years, most of the Fortune 500 companies have either shrunk or, worse, imploded, much like the Death Star. What I’m trying to articulate is that as marketers, we can no longer stand idly back and do business as usual. We can no longer rely on the past to inform the future. The real question we need to be asking ourselves is how do we plan for the unthinkable and be ready to respond accordingly. Essentially, how do we leverage ALL the data we have instead of looking at just historical data to predict outcomes when the way our customers are doing business is rapidly evolving?
The answer lies in anticipatory analytics.
Anticipatory analytics builds on the foundation of predictive analytics by incorporating a number of real-time data points, such as the acceleration and deceleration of certain business behaviors or sudden changes in business direction that are happening in near real-time, to help you plan for unseen events. Anticipatory can help you identify and adjust your marketing approach based on a range of inflection points like looking at a company’s changing credit scores, employee growth, their investments or even recent mergers or acquisitions as close as we can to when they are happening, as well as a whole slew of other data that changes on a daily basis. Historical data alone will never provide that level of insight.
By examining changes in this real-time data, you can better anticipate which companies are going to grow and which companies are going to decline or go flat. For example, if a company that has traditionally been stagnant is suddenly investing heavily in their infrastructure, their credit scores are improving, and they are receiving an influx of VC capital, there is an indication that this company is going to grow and you should be marketing to them.
Why is that so powerful? Because your competitors are likely not doing that. They're either looking at historical data or focused on traditional means to figure out what company to target. So that gives you the differentiation, and over time, you start forming trusted relationships with the right companies and the competition likely won’t recognize these companies until it may be too late. At this time, it’s your first-mover advantage.
Let me give you an example of how Dun & Bradstreet used anticipatory analytics to help one of our financial partners. High-growth companies typically make the strategic investment of capital a top priority. Understanding this, our partner wanted to prioritize targeting these burgeoning companies with offers for loans or lines of credit before it sought financing from competitors. Therefore, the company needed a tool to identify existing customers that were poised for growth. By combining real-time data with comprehensive contact-level data, we were able to append “growth” and “decay” segments to an audience test file to differentiate the trajectory that its small business customers were displaying. We then measured the year-over-year increase in loans/lines of credit for each segment, and measured the percent of dollar change in each. This helped our partner understand future plans based on the predicted stability of those commercial entities and identify likely prospects, resulting in increases of its top growth segments that it was not otherwise aware of.
Again, this is all possible because of the ability to process real-time data. What companies can do to put this to work for them is take the real-time data they are capturing across their enterprise – bringing in data from all departments, not just marketing, and marry it to third-party data that helps ensure it is accurate and complete. You can consume this data no matter the size of your business because of the power of processing data in the cloud and consuming it as a service. You can then build analytic models to predict which companies are growing or declining in the future, and use that to target versus solely looking at history. That’s the essence of anticipatory analytics.
If you want to see how anticipatory can work for you, I recommend checking out this whitepaper that goes a little deeper into how this works.