It’s challenging yet crucial for retail businesses to get an edge in the competitive market of today. Having the tools for exploring customer behavior and prioritizing leads promotes productivity as well as helps to increase the bottom line of businesses.
Predictive analytics in sales has evolved a lot over the last decade. The technique is now much more accessible to businesses of traditional industries. For many businesses, predictive sales analytics is a powerful tool in assisting with operations and sales support.
Ten years back, only large-scale technology companies were able to afford to build or implement sales analytics software for reducing customer churn or finding cross-selling opportunities.
Nowadays, even medium and small-scale businesses with limited marketing budgets are able to access these advanced solutions and employ them for a wide range of circumstances, which include B2B sales.
Sales Forecasting Using Predictive Sales Analytics
The dependability of sales forecasts informed by predictive analytics in sales rests chiefly on the quality of the historical data it uses. This is the reason data collection should be clean, thorough, and performed consistently.
In case the historical data is not accurate, the predictive analytics forecasts based on it would also not be accurate.
As a business grows, its predictive sales analytics capabilities can grow with it. In several cases, businesses consistently employ CRM integrations, additional sales platforms, and other avenues that need data storage.
These types of additions, and the sales pipeline changes coming with them, can either hurt or improve your business’s predictive analytics forecasts, based on how seamlessly those various databases can be synced.
As we said above, the accuracy of forecasting through predictive sales analytics depends on the data it draws from. Hence, your sales representatives need to be timely and diligent when it comes to uploading sales data to databases that your team is using.
Use Cases of Predictive Analytics for Retail
In today’s times, predictive analytics is widely used by businesses for analyzing target customers to obtain operational results. When it comes to the applications of predictive analytics for the retail industry, the list is never ending. Here are some key use cases of predictive analytics for retail:
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Churn Prevention
When a customer is lost by a business, it needs to compensate for the revenue loss by getting a new customer. This is an expensive process. That’s because cost of bringing a new customer is far more than that of retaining the existing customer.
Predictive analytics models help you prevent churn in the customer base by analyzing dissatisfaction in your current customers. Additionally, they identify segments of customers that have the highest risk of leaving. Using predictive data, your business can make the required improvements to keep customers satisfied, protecting your revenue eventually.
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Customer Lifetime Value
It’s a challenging job to identify customers who have the greatest likelihood of spending large amounts of money over a long time period consistently.
This type of data through predictive analytics enables your business to optimize your marketing strategy to acquire customers with substantial lifetime value towards your products and company.
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Customer Segmentation
Customer segmentation allows you to group customers based on shared traits. Different businesses determine their target markets differently based on aspects offering the highest value to their products, services, and company.
Using predictive analytics techniques effectively helps you target the market on the basis of accurate insights. Moreover, it helps you analyze the segments of customers that are most interested in your offerings. With predictive analytics techniques, you make decisions backed by data for every aspect of your business. The same data also allows you to identify an entire market that you don’t even know existed.
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Product Propensity
Product propensity merges behavior data and purchasing activity with online behavior metrics from e-commerce and social media. It allows businesses to identify the interest of customers in purchasing their products and services, as well as the medium for reaching those customers.
It helps in correlating the data to offer insights from different social media platforms and campaigns for your products and services. Predictive analytics techniques are highly effective in maximizing the channels that have the greatest chance of generating significant revenue.
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Sentiment Analysis
It’s virtually impossible to review and capture everything customers say about your business.
However, by using crawling tools for customer feedback and posts, businesses can create analytics that can help you get a clear idea of your business’s reputation in the market. With predictive analytics models, you can get proactive recommendations for enhancing that reputation.
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Cross-selling and Up-selling
Your customer base is your source of revenue growth and existing revenue. Eventually, it becomes important to maximize the possible opportunities for revenue in your target market segment and product set.
You can use purchasing history data to determine which products can be offered together. Predictive analytics in sales offers suggestions on market segments for boosting the revenue received from your customers and your customer value. Hence, your sales increase, and customers walk away with products that work together.
Concluding Thoughts
Although predictive analytics in sales can help you predict future outcomes, you don’t need to dive headfirst with it. You can initiate using the technique with a small segment of your business, and test the predictive analytics tools and see how they work. If you get results, you can expand its use across your business’s other segments.
Nevertheless, getting the implementation of predictive analytics right can be rewarding for your retail business. To make the most of predictive analytics for your business, it’s helpful to have the experts in the field by your side. At aQb Solutions, our marketing consultants can guide you through each step of implementing the technique for your business. To know more about how we can help you, reach out to us today!
