This article appeared in ModernRetail. Read it in full here.
Bryan Gernert, CEO, Resonate
With billions of consumer data points, many marketers find themselves drowning in a sea of information, struggling to extract meaningful insights. In addition to being simply overwhelming, traditional data management tools often fall short, with limitations in quality, accessibility and real-time capabilities.
This is where AI-powered solutions come into play. This new generation of tools helps brands and agencies leverage the full potential of their data and cut through the noise. Marketers benefit from actionable insights delivered quickly to respond to prospects and customers on a deeper level.
Segmentation approaches fall short of precisely predicting consumer behavior
Traditional approaches to segmentation give brands and agencies four to five customer segments based on demographics like age, gender and income. However, only 10-15% of purchase behaviors can be explained solely by demographics, according to internal Resonate data. Not only do these approaches have limited predictive power, but demographics alone only scratch the surface of consumer behavior. As a result, marketers make educated guesses about consumers that, despite diverging habits, are grouped the same.
Conversely, AI-powered consumer data is based on actual behaviors and preferences — including purchase history, brand interactions and real-time data. This enables pattern recognition, dynamic targeting, automated outcomes and personalization at scale. With these kinds of precise insights, marketers can answer critical questions about when customers will make their next purchase, what they’re most likely to buy, if they are likely to make repeat purchases and build profiles in line with their best customers.
Advanced predictive models uncover actionable consumer insights at scale
At the heart of this next generation of AI-powered data are custom modeling solutions that use first-party data insights and behavioral data to score consumers based on their likelihood to churn or develop into a high-value customer. The scores are available for any use case related to insights, targeting and customer lifecycle.
AI-powered predictive modeling is purpose-built for marketers who need premium data, technology and resources to build customer-based propensity models. It transforms business strategy by leveraging state-of-the-art AI, observed behavioral data and expert resources to quickly identify marketers’ most valuable customers and prospects.
Some predictive models are limited by a lack of dynamic behavioral data, and in a world where consumer preferences are changing rapidly, this makes it hard to stay relevant. Newer predictive models can be appended back to the customer’s CRM file, activated by targeting existing customers or used to identify new ones, or loaded into another platform for further analytics and activation.
These models’ unique combination of scale, sophistication, speed and precision unlocks better performance and cost savings for marketers. Integrating an organization’s first-party data with advanced models’ vast, observed behavioral data — which brands do not have access to on their own — allows marketers to better understand and connect with their customers.
With advanced models that are continually updated — providing marketers with living models rather than the static, point-in-time snapshots — organizations also save on the cost of sourcing data and don’t have to invest the time and expertise to perform predictive modeling.
AI-powered data is foundational for deeper and more fruitful customer relationships
Equipped with these advanced models trained to predict future consumer actions based on past behaviors, marketers uncover deeper, more meaningful patterns and scoring. This isn’t just about insights; it’s about predictive accuracy, faster speed to insights and giving marketing teams the tools to anticipate and respond to consumer needs in real time. With the ability to deliver insights quickly and consolidate multiple data sources, organizations can reduce costs by up to 40% while increasing efficiencies.
For instance, businesses that use Resonate AI-powered data have achieved a 35% increase in email engagement rates, a 28% improvement in conversion rates, an 18% reduction in customer acquisition costs through more targeted advertising and a 22% increase in customer lifetime value.
Ultimately, AI-enabled solutions give marketers the power to stay ahead in a world where buyer preferences are changing rapidly by understanding and predicting consumer behavior with depth, precision and scale. By leveraging precise customer insights to deliver the right message at the right time, brands and agencies increase engagement, improve conversions and boost sales.
