For most of the past century, marketing was far more of an art than a science. Marketers made decisions primarily off of intuition. Their models have shifted markedly in recent years, as big data plays a more important role in customer outreach and engagement. Predictive analytics is taking data-driven marketing to the next level.
Brands can use predictive analytics to get a better pulse on their target customers. They can predict future demand for various products among each customer segment. Predictive analytics models that help them make these forecasts allow them to allocate the resources more efficiently. Marketing teams that utilize predictive analytics can account for countless nuances to implement more holistic marketing models.
However, the ultimate success of their marketing strategy hinges on their ability to collect the right data. Location and demographic data are essential to any marketing campaign. Predictive analytics models will be virtually useless without having this data on your customers. This is especially important in the hospitality industry, which is heavily dependent on demographic trends. Companies that want to create a hotel booking website need to make sure they understand the lucrativeness of different demographics and appeal to them appropriately.
Appreciating the importance of location and demographic data in predictive analytics for marketing
Big data is offering new solutions to age-old marketing challenges. One of the biggest ways that marketers are capitalizing off of it is by improving their lead scoring models. ReachForce has pointed out that a growing number of marketers are requesting demographic data to score their leads more effectively.
Unfortunately, lead scoring is more complex than many marketers would like to think. They often view it from an entirely static lens. The problem is that the intrinsic value of each demographic is going to change significantly over time.
You can see this in many industries. Housing is one of the most evident. Shortly after the economic crisis, millennials were highly unlikely to purchase homes. They were straddled with massive amounts of student debt and were unable to find decent paying jobs.
Today, that is no longer the case. Young adults have rebounded from the abyss of the recession and turned their financial lives around. In 2019, millennials are responsible for the majority of new home purchases. This trend is probably going to intensify as they continue getting better-paying jobs and baby boomers gradually exit the workforce.
Marketers in the real estate industry always evaluated age groups of their customers while scoring leads. However, marketers that missed these trends would not have updated their lead scoring models accordingly. During the great recession, they would have been prudent to focus on generating leads from older consumers. Today, young adults are more promising leads.
Predictive analytics helps marketers score leads, both today and in the future. These models don’t just look at the expected value of a lead from a given demographic have a fixed point in time. Instead, they accumulate data across numerous dimensions, including income, population growth and demand for various products. All of this data can be carefully consolidated into A seamless model that predicts future buying behavior.
Predictive analytics is not just helpful for lead scoring. A lot of companies are starting to use it to identify new opportunities that would otherwise be entirely overlooked. They may have completely missed certain markets until these algorithms helped identify them.
The hotel industry is using predictive analytics for this very purpose. Multinational companies like a Marriott are trying to get a better understanding of their customers with predictive analytics. One of the ways that they can benefit from it is by studying the locations of some of their most promising customers. Globalization is becoming increasingly important in these industries. Hospitality companies can identify countries that are showing the most demand for travel services. This helps them invest their marketing budgets to reach customers in those regions to get the best ROI.
