Monthly Archives: April 2016

So you need prescriptive analytics on your business

Big Data gets a lot of buzz in the business world. It’s true that data analytics can give you deep, useful insights into your business and its customers, but only if you use those insights to their full potential.

There are three main components to business analytics: descriptive, predictive and prescriptive. Descriptive analytics — the “simplest class of analytics,” said Lithium Technologies’ chief scientist Michael Wu — is your raw data in summarized form. It’s your social engagement counts, sales numbers, customer statistics and other metrics that show you what’s happening in your business in an easy-to-understand way.

Predictive and prescriptive analytics are the next steps that help you turn descriptive metrics into insights and decisions. But you shouldn’t rely on just one or the other; when used in conjunction, both types of analytics can help you create the strongest, most effective business strategy possible.

“Predictive by itself is not enough to keep up with the increasingly competitive landscape,” said Mick Hollison, CMO of sales-acceleration software company “Prescriptive analytics provide intelligent recommendations for the optimal next steps for almost any application or business process to drive desired outcomes or accelerate results.”

“Predictive analytics forecasts what will happen in the future. Prescriptive analytics can help companies alter the future,” added Immanuel Lee, Web analytics engineer at MetroStar Systems, a provider of IT services and solutions.”They’re both necessary to improve decision-making and business outcomes.”

Analytics in action

Both types of analytics inform your business strategies based on collected data. But the major difference between predictive and prescriptive is that the former forecasts potential future outcomes, while the latter helps you draw up specific recommendations.

“Prescriptive analytics builds on [predictive] by informing decision makers about different decision choices with their anticipated impact on a specific key performance indicators,” said Thomas Mathew, chief product officer at influencer engagement platform Zoomph. “Think of [traffic navigation app] Waze. Pick an origin and a destination — a multitude of factors get mashed together, and [it advises] you on different route choices, each with a predicted ETA. This is everyday prescriptive analytics at work.”

Guy Yehiav, CEO of business intelligence company Profitect, said that as the retail landscape changes, businesses can use prescriptive analytics to clarify predictive data and improve sales.

“Predictive analytics is great, but it’s for the people who understand the report at the end,” Yehiav told Business News Daily. “What it’s missing is … execution. Prescriptive give answers to the questions you don’t know how to ask.”

To clarify how both types of analytics can be used together, Yehiav gave the example of a retailer that offers free expedited shipping to loyal customers. Based on past customer behavior, a predictive model would assume that customers will keep the majority of what they purchase with this promotion. However, one customer purchases eight items of clothing but decides to keep only one.

“The retailer paid for expedited shipping with the assumption that there’s this great consumer out there who bought eight items, so they’re willing to invest and lose a little margin [on shipping],” Yehiav said. “The algorithm didn’t take [return] behavior into account.”

For this retailer, reducing its losses on “outlier” customers who don’t follow what predictive analytics forecasted means having policies in place to cover itself. Using prescriptive analytics, the retailer might come up with the options of giving an in-store-only coupon to customers who make returns (to encourage another purchase in which shipping isn’t a factor) or notifying customers that they must pay for return shipping, Yehiav said.

Arijit Sengupta, CEO of automated business analytics company BeyondCore, offered another example of how a nationwide sporting goods store might use predictive and prescriptive analytics together. The store’s forecasts indicate that sales of running shoes will increase as warmer weather approaches in the spring, and based on that insight, it might seem logical to ramp up inventory of running shoes at every store. However, in reality, the sales spike likely won’t happen at every store across the country all at once. Instead, it will creep gradually from south to north based on weather patterns.

“To flip the switch on massive running shoe distribution nationwide would be a huge mistake, even though the predictive analytics indicate sales will be up,” Sengupta said. “But, with prescriptive analytics, you can pull in third-party sources like weather and climate data to get a better recommendation of the best course of action.”

Putting analytics to work

Our expert sources offered a few tips to help you make the most of your analytics programs.

Start small. There’s a lot your business needs to think about in data analytics, and you don’t want your best insights to get lost. Lee advised thinking big with your overarching analytics strategy, but starting small tactically.

“With the complexity of big data and the systems that manage and process data, we can easily overlook the fact that sometimes there’s a solution in the simplest thing,” he said. “Small wins will help earn support for long-term analytics projects.”

Create rich data sets. Running and marketing a business comes with a lot of “what-if” scenarios, and as demonstrated in the example above, predictive analytics doesn’t always account for those alternate scenarios. Mathew said looking at your predictive analytics more closely to create richer information sets — accounting for demographics like gender and age, for instance —will yield better results from your prescriptive recommendations.

“For example, social media marketers care about maximizing engagement and reach on their social posts. Prescriptive analytics can make data-driven recommendations such as use of a specific hashtag or emoji to maximize social traction with a specific audience segment,” he said.

What is you need in Marketing Software

There are two good reasons to adopt email marketing as a core component of your marketing campaign: It’s easy and inexpensive to create and it can deliver an impressive ROI ($44 for every $1 spent). Few marketing tools offer so much for so little.

To figure out if email marketing is right for your business, it’s critical to understand exactly what it is and how what your options are. Here’s what you need to know:

Understanding email marketing

  • Email marketing is essentially the online version of direct mail. Instead of sending fliers and coupons to a customer’s home, email marketing sends those same items digitally to a customer’s inbox.
  • Whereas the impact of direct mail can be difficult to track, email marketing lets businesses see exactly who is opening their mail and which emails are leading to sales.
  • Businesses can use email marketing in a variety of ways, from building brand loyalty and finding new customers to encouraging loyalty and repeat business.
  • With email marketing, you have a choice of do-it-yourself software or full service agencies that do all of the work for you. You can read more about the differences between the two below.

What the experts say: “Email marketing is one of the most effective methods of direct communication between a brand and its customers,” said Seamas Egan, manager of revenue operations for Campaigner. “It is the leading generator of ROI over any other type of direct marketing and can be used for multiple use cases, including promotions, informational content, social sharing, relationship management and more.”

Target Customer Plan Tips

If you’re starting a business, you’ve probably defined your “target customer.” You know their age, gender, location and perhaps even their income and education levels. But demographics alone won’t give you a complete picture of who’s buying your products.

“Understand intimately who your customer is,” said TJ Parker, CEO and founder of PillPack, an online pharmacy and medication management service. “If you don’t know your customers, it’s hard to … communicate [your product’s] benefits so they react positively.”

So what else should you be learning about your customers, aside from basic demographics? Here are the top three things you should find out, and how to incorporate that information into your strategy.

This is perhaps the single most important piece of the customer puzzle. No matter how well you’re projecting your customers’ values and interests, you ultimately won’t succeed if you don’t show that your product or service solves a problem for them.

For example, PillPack has succeeded because it has invested a lot of energy into understanding the hassles that people go through every day while trying to order, refill and manage their prescriptions via a traditional pharmacy, Parker noted.

“How do you build relationships with customers [and] get to this place where the customer feels like [you are] like a friend?” Parker said. “You can’t do that unless you understand the problems they deal with.”

Their values

When you know what your target customers care about, it’s much easier to create marketing materials that resonate with them. Jennifer Borba von Stauffenberg, founder and president of Olive PR Solutions, said that figuring out your audience’s values and attitudes is crucial, because connecting with your customers on this level allows you to develop an authentic, long-term relationship with them.

These same core values can also help you develop your brand “voice” or personality.

“In order to communicate to your target audiences, you have to ensure you are clear about your brand by defining its personality and voice,” Borba von Stauffenberg said. “[By] which voice would your target audience be most influenced?”

Their online browsing habits

When potential customers visit your website and social media pages, how are they interacting with your brand? Are they sharing certain types of posts? Searching for specific content features? Most importantly, what ultimately leads them to click through to your product pages? Tracking these browsing and search activities can help you figure out the best way to drive traffic where you want it to go.

“[Our company] sells very special works of art and luxury items that have great stories,” said Kristen Yraola, vice president and digital marketing directors at Christie’s art and luxury auction company. “We leverage these stories into digital content to create consideration of our sales. We look at engagements with all types of content articles — How To’s, Specialist Picks, Living with Art — to figure out which content types ultimately drive a viewer to visit our online auction.”

Finding and using customer information

There are two primary ways to extract this information. The first, and perhaps most obvious, is pulling and analyzing data. Modern marketers have numerous data sources, tracking tools and analytics programs at their disposal, so be sure to take advantage of what’s out there.

“Data is a marketer’s best friend,” Yraola said. “Being able to understand who is visiting our site, what they are doing [there] and then where they go after they leave [the site] has helped us to effectively market by targeting similar consumers throughout the Web to increase awareness of our brand.”

The second method — which requires a little more effort but is just as, if not more, beneficial — is to speak with customers directly to find out what they’re looking for. Parker, who has a background in the pharmaceutical industry, noted that approaching his market research with a “beginner’s mind” helped him figure out how to best reach PillPack’s customer base.

“The longer you’ve been in an industry, the easier it is to think you have all the answers,” Parker told Business News Daily. “It’s productive to sit with customers and [have them] interact with your product, website, etc. to see how they react.”

Once you’ve identified key traits about your customers, you need to devise a marketing plan that helps you bring it all together. Above all, that strategy should strongly, proudly and reliably reflect the brand image you want to portray.

“It’s really about identifying your organization’s values and aligning with a target market that shares those values,” Borba von Stauffenberg said. “Through your marketing, you should be delivering consistent messaging that confirms over and over again who you are.”

How to improve your business as well

In this day and age, it’s almost impossible to get away with not having a website for your business. Even small, local businesses can benefit greatly from having a simple Web page that provides potential customers with more information. And it’s not a matter of having a website in the first place — your website needs to be built with quality and customers in mind in order for it to be effective.

So how do you create a website — or improve your existing site — that will build up your business? We asked business owners and Web experts to share their advice. Here are five simple tips for achieving online success.

Plan your website thoroughly before you build it

You may want to get right into the creative process, but it’s important to take the time to plan the structure of your site and your goals before you start building or revamping your design.

“My No. 1 tip for creating an effective website is to spend adequate time on planning and strategy at the beginning,” said Anna Stout, owner of Web design and marketing company Astute Communications. “I’ve seen so many Web designers skip the planning process and jump straight into design. By doing this, you end up with a product that might look good, but it doesn’t serve any particular goals.”

By outlining your goals and priorities and mapping out your site architecture first, Stout said that you will create a website that will actually be an effective tool for your business.

“To that same end, creating content first, and designing around that content will allow the business to feature its important messaging, rather than trying to fit its message into an existing design,” Stout said.

Stout’s company uses a 6-step process for each Web project. This process starts with planning, research and goal and priority identification, and is followed by creating a sitemap and user flow diagram that anticipates how users will interact with the business. Then, they consider the customer acquisition funnel, which is how a user moves through the site to a point of conversion, be it a sale or signing up for an email list, for example. From there, the focus is on content development, then the creating of a visual interpretation of the hierarchy of information on the site. The last step is the actual site design.

“Each step of this process informs the next,” Stout said. “Ultimately, by the time we reach the design phase, we have developed the inner workings of the tool that is your company website,” adding that the process eliminates any guesswork.

Track your changes

Just building a good website isn’t enough — you have to sure you’re keeping up with changes, too. That’s why it’s important to look at and understand your site analytics. You can use this information to improve your website and bring in more visitors.

“Measure — that’s the most important piece of advice I can give you,” said marketing professional Sharon Mostyn. “I have been working with websites for almost 20 years now, and with the numerous free and affordable website analytics tools, there’s no reason to make a change to your site and not understand what it impacts.”

First, Mostyn said, you need to decide on the metrics  you want to measure, and then track those over time.

“That can be anything from the number of site visitors, the number of sales, the bounce rate, where you’re ranking in organic search results, your quality score for pay-per-click advertising, or something else entirely,” Mostyn said. “Of course, to get a holistic picture, you should track all of these metrics and more.”

When you make changes to your site, pay close attention to how the metrics change, Mostyn said. You can also try this out in other ways, for example, with a split test.

“If you can, you may want to consider doing a split test before implementing a more permanent solution,” she said. “This allows you to compare results without making too big a sacrifice if the test doesn’t perform the way you think it should.”

The key is to test, measure, optimize and repeat, Mostyn said, adding that you may not even realize how much a simple change can affect business.

“Sometimes, changes that you think will have fantastic results will yield nothing,” she said. “Or the smallest changes may drive major results. One website I manage added a link to a video on the homepage and saw a 78 percent increase in conversions. We wouldn’t have known how that minor change affected things if we hadn’t already been tracking our conversion rate.”