All marketing blogs that matter agree that 2011 will be about prospect and customer targeting. The Million Dollar Question: How to serve the right content to the right audience at the right time through the right communication channels? Many call the discipline focused on answering this question Content Marketing.
Why? Costs go down, conversion rates go up, and on average, customer life cycles will be extended, which will have a positive impact on overall revenue. A million dollar question, indeed!
In their 2006 Harvard Business Review Article “Knowing what to sell, when, and to whom”, Kumar et al state that “despite the abundance of data that many companies collect, most do a poor job predicting the behaviour of their customers.” They go on to present a rather crazy mathematical function to estimate the likelihood (Li) that a given customer or household (i) will purchase a given product at a given time.
Applying this formula to customer data “ups the odds of successfully predicting a specific purchase by a specific customer at a specific time to about 80 per cent, a number that will have a major impact on any company’s marketing ROI.” You can buy the full article for a mere $6.95 here.
However sophisticated this thinking, it applies strictly to customers. What about prospects? How can we estimate the likelihood of a prospect converting into a customer? By delivering on the promise of Content Marketing.
In 2011, paid, owned and earned media models will be refined to enable companies to move from 1-to-many to 1-to-few communication strategies. Push and pull tactics will have to be re-articulated in the new social marketing paradigm. Marketing Automation systems are designed to gather digital body language and help marketers identify response patterns in order to predict future audience behavior. Lead nurturing and scoring mechanisms will help us understand which prospects are ready to engage. Integration with Sales CRM systems and Customer Data Warehouses will close the loop between marketing and sales and eventually bring a higher return on marketing and sales investments.
Eventually, the content marketing strategist will be able to calculate and predict the likelihood of a given prospect converting in to a customer. Let’s use 2011 to work on the statistical function to come with it!