- Leaders who use predictive analytics outperform followers, achieving a 75% higher click through rate and 73% higher sales lift.
- Leaders deliver significantly higher ROI, with a 13% increase in lifetime customer value compared to a 2% increase for followers.
- To maximize ROI from predictive analytics, companies should focus on capabilities like customizing individual marketing offers and applying behavioral scoring to customer data.
IBM - Using Predictive Analytics to Segment, Target and Optimize Marketing
1. Divide & Conquer
Using Predictive Analytics to Segment, Target and Optimize Marketing
February 2012
Trip Kucera, David White
~ Underwritten, in Part, by ~
2. February 2012
Divide & Conquer: Using Predictive Analytics
to Segment, Target & Optimize Marketing Analyst Insight
Data collected by the Aberdeen group in August 2011 (Predictive Analytics for Aberdeen’s Insights provide the
Sales and Marketing: Seeing Around Corners) found that companies using analyst's perspective on the
predictive analytics enjoyed a 75% higher click through rate and a 73% research as drawn from an
higher sales lift than companies that did not use this technology. However, aggregated view of research
new research published here (based on data collected in December 2011) surveys, interviews, and
shows that even among users of predictive analytics there are significant data analysis
differences in the level of business performance achieved. These
performance differences accrue from subtly different applications of
technology, as well as different capabilities within the organization. This new
research reveals the best practices sales and marketing organizations can
Defining Leaders & Followers
adopt to maximize their return on investment (ROI) in predictive analytics.
Aberdeen measured the overall
performance and effectiveness of
Leaders Deliver Significantly Higher ROI
marketing organizations that
Leaders (the top-performing 35% of companies) outperform Followers (the participated in our survey, based
remaining 65% of companies) in several aspects of marketing performance. on their aggregate performance
Figure 1 illustrates three of these metrics. on 4 criteria. The top performing
35% of companies (Leaders) were
segmented from the remaining
Figure 1: Marketing Leaders Outperform Followers 65% (Followers) using the 4
criteria below. The relative
performance of Leaders and
13.0% Followers is also shown:
Y-Y change in lifetime
customer value 2.3% √ Average uplift from a
marketing campaign - Leaders
6.7%, Followers 3.3%
Average response 7.1% √ Year-year change in the
rate average value of a sales
4.8%
transaction - Leaders 13%
Leaders increase, Followers 2% decline
Followers
√ Year-year change in customer
2.6% retention rate - Leaders 4%
Average opt-out rate
3.9% increase, Followers 1%
increase
√ Year-year change in operating
0% 2% 4% 6% 8% 10% 12% 14%
profit margin - Leaders 3%
Percentage, n=112 increase, Followers 0% change
Source: Aberdeen Group, December 2011
Although both Leaders and Followers use predictive analytics, leaders use
this technology to drive much greater business impact on sales and
This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and
represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc.
and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.