How to increase conversion rates with predictive marketing

Competition is fiercer than ever. Consumers have more options than they’ve ever had, and they want the perfect solution right now. Many of them won’t convert unless they’re offered custom-fit solutions and a personalized experience. Predictive marketing and analytics are some of the most effective ways to create unique experiences for your customers and increase conversion rates for your sales team.

Keep reading to learn how to increase conversion rates with predictive marketing and analytics.

The number one way to increase conversion rates: Predictive lead scoring

Normally, lead scoring involves your sales team assigning lead scores by hand based on how likely they believe it is that those people will lead to a conversion. They create the scores using a combination of demographic data (salary ranges, education levels, marital statuses, etc.) and other available information like how they’ve interacted with the company in the past and their typical behaviors.

However, there’s a big issue with this kind of lead scoring: It’s been overly simplified. It’s become more of a method to identify poor leads rather than one to find the best. These lead scores also frequently get assigned based on a sales team member’s personal intuition and experience instead of through the use of data analysis, meaning they aren’t always as accurate as they could be.

Predictive lead scoring involves taking data from sources like social media and your customer relationship management (CRM) and customer data platform (CDP) systems to generate scores based on calculated predictions of your leads’ personalities and behaviors. To generate these scores, marketers use algorithms that constantly learn from real-time data—this means the accuracy continually improves and becomes even better each time it processes more leads.

How to increase conversion rates with predictive lead scoring

Both your marketing and sales teams play a crucial part in your company, but to increase conversion rates, they need to work together seamlessly. In a general sense, your marketing team should generate leads while your sales team turns them into conversions.

The problems start when low-quality leads make it to the sales team, and they spend time and resources on leads that aren’t likely to convert. At the same time, there might be excellent leads getting neglected and lost in the pipeline before the sales team even gets a chance to work with them.

Predictive lead scoring automates the process so that sales teams are free to actually work on converting leads, but it has another significant benefit: It can identify which leads have the highest value so that your sales teams know where to concentrate their efforts to get the best ROI.

You can leave the leads that aren’t ready to convert with the marketing team so that they can slowly guide them down the sales funnel. That way, once they are ready to convert, you can move them over to the sales team ready to go.

Predictive lead scoring utilizes first-party data from your CDP, analytics from your marketing team, and information from your sales team’s CRM. Because the process is automated, delays in processing leads and mistakes stemming from human error are almost non-existent.

If you’re questioning how to increase your website conversion rate and how to increase your landing page conversion rate, the answer is simple: predictive marketing and lead scoring. It allows marketing teams to deliver high-quality leads to your sales team and form a better definition of leads that are ready to convert.

9 ways that predictive marketing & analytics can increase conversion rates

Lead scoring isn’t the only way to increase conversion rates with predictive marketing.

Here’s how to increase conversion rates using predictive analytics:

1. Audience segmentation

Predictive marketing can increase your conversion rates by helping you segment your leads and customers better. By creating more specific campaigns, you can move leads through the sales funnel more efficiently while boosting engagement. There are three ways that predictive marketing enhances audience segmentation:

• Affinity analysis, which works by segmenting groups based on shared attributes
• Churn analysis, which helps determine which customers are leaving during specific periods and in particular pipelines
• Response modeling, which predicts how future customers will react to different scenarios

2. Targeted content

You can use predictive analytics to determine the types of content that work best with each audience segment and the channels that they use the most, making future marketing decisions more successful. Delivering personalized experiences through custom content creation and distribution initiatives increases the probability of leads moving through the sales funnel and, ultimately, increases the conversion rates of your campaign.

3. Customer behavior

Predictive marketing helps—you guessed it—predict your customers’ behavior. This works by combining first-party data collected from past campaigns, along with your customers’ demographic information, to build a model that can predict their next actions and what it will take to get them to convert. You can rank customers or segments based on their likelihood to take a certain action or make a purchase so that you can approach them appropriately with a personalized marketing strategy.

4. Product & service fit

You can use a combination of first-party data, historical information, and what you already know about your leads to gain a better understanding of what your current customers want. Using this information to predict what your customers might want from your product or service in the future is an excellent way to increase conversion rates. You can work towards developing new products and features that go deeper and better meet your customers’ needs.

5. Customer acquisition

Once you’ve used predictive marketing to create better customer segments, you can use your behavioral data to build identification models. These models increase conversion rates by helping you identify prospects that closely resemble your best customers, allowing you to target them in an efficient way and turn them into leads and converting customers.

6. Upselling & cross-selling

You can combine your predictive analytics and customers’ behavioral data to create more upselling and cross-selling opportunities to increase overall profits. You can also market better to your current customers by identifying behavioral patterns and using them to your advantage.

For example, let’s say that your customers typically start off by purchasing a subscription to your base product, and after four to eight months, a decent percentage of them upgrade to the next tier. You can create specific campaigns to target those customers around the four-month mark to help increase your upsell rate to both the customers who would have converted in the next few months and ones that may not have considered making the upgrade.

7. Customer lifetime value (CLV)

Using the same three methods we mentioned when talking about audience segmentation, you can also make predictions about your CLV. You can use historical customer data to identify which groups are the most profitable, which segments have the highest brand loyalty, and which marketing tactics generate the best ROI.

Knowing your customer lifetime value lets you better understand how valuable different customers are to you throughout their lifecycle and predict their future value, lifespan, and revenue generation. Predicting your CLV increases conversion rates by helping you understand customer acquisitions costs and plan your budget and expected ROI based on those costs.

8. Future campaigns

The more you know about your customers (and the more you can predict about their behaviors), the better for your marketing campaigns. Increasing conversion rates is easier when you have more precise targeting and the ability to build campaigns that connect with both your leads and your current customers.

Predictive marketing reduces risks by taking out some of the guesswork that comes with running a new campaign. It also leads to faster growth rates, higher ROI, and an increase in conversion rates. Incorporating predictive analytics into your marketing technique doesn’t guarantee success, but it does increase your odds by giving you insights into how your future tactics will likely perform.

9. Customer churn

The goal is for your churn rate—the percentage of people who quit doing business with your company for one reason or another—to be lower than your growth rate. With predictive marketing, you can identify the red flags that appear right before a customer leaves. Usually, there’s some sort of trend, and if you can find it, you’ll know what is going wrong so that you can focus on those issues. Recognizing those red flags can help you address the problems before you lose customers.

Increase your conversion rates with a CDP designed for marketers

While predictive marketing and analytics are excellent tools for increasing conversion rates, they’ll only get you so far by themselves. You also need high-quality content so that you can engage with leads and customers at every stage of their journey. Providing your leads with the content they want to see, when they want to see it, and where they want to see it is crucial for the success of your overall marketing strategy.

Now that you know how to increase conversion rates with predictive marketing, it’s time to take it a step further by combining these strategies with your customer data platform. Increasing conversion rates for ecommerce businesses is a big task, but you can make it easier.

Customer data platforms like Lytics help simplify the marketing process by collecting and interpreting customer data to give you real insights into your customers’ behavior, wants, and needs. This data is the backbone of the predictive marketing strategies that lead to an increase in conversion rates. Utilize a CDP to create better customer profiles so that you can send them personalized content at the right time and in the right place.

Get started with Lytics today and see how predictive strategies can increase your conversion rates, revenue, and overall marketing ROI.