Aberdeen Group has just released a new research report by David White, “Predictive Analytics – Driving Sales with Customer Insights”. I think this is a ‘must-read’ for any marketer struggling to improve revenue. Right off the top I’ll make full disclosure: White’s case study for existing customer marketing describes the work Loyalty Builders is doing with our customer, Sullivan Tire. Even if the exciting Sullivan Tire story was not part of the report, I’d still urge you to read it.  Here’s why:

First, White makes a strong case for using Predictive Analytics to grow revenues. He reports that “Best-in-Class companies were able to grow incremental sales by 24% since adopting predictive analytics.”

Second, he describes the techniques and strategies that work, such as:

• Improve targeting of marketing offers
• Improve cross-sell / up-sell opportunities
• Build unique customer profiles and personas

Third, the report lists the benchmarks against which you can measure your own company’s performance, such as:

• Having a customer segmentation tool
• Ability to apply behavior scoring to customer data
• Automated rules based process engine

Fourth, the report is stuffed with pithy insights like:

• “Best-in-Class companies are about 30% more likely than all other companies to apply predictive analytics to customer scoring applications.”
• “Good segmentation… [is]…based on different buying characteristics so that particular sales objectives can be met.”

Fifth, the report spells out the “Steps to Success” for companies at all the different performance levels. For example, the steps for Best-in-Class companies include:

• “Ensure business staff are able to use predictive tools with a statistical expert.”
• “Integrate predictive analytics into the forecasting process.”

For Loyalty Builders customers, all of this probably seems obvious and awfully familiar, but not all companies are Loyalty Builders customers (yet). For us, it was validating to read the Sullivan Tire case study in the report because Sullivan has been doing all this and more.  Of course we already knew the bottom line results — a five-fold increase in response rate and a $40 jump in order size — but it was particularly gratifying to see Sullivan Tire recognizing that their marketing has shifted from being store-centric (they have over 50 service centers) to customer-centric, and as the report says, “all driven by predictive analytics.”

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