AI and Predictive Analytics
New technologies such as artificial intelligence (AI) and predictive analytics are transforming online businesses. They allow you to use new and more effective marketing methods, improving financial results and gaining additional competitive advantages. The most important thing is that most of the work is done automatically. All you have to do is make appropriate management decisions and launch marketing campaigns.
Wondering how you can apply new technologies in practice? Let us tell you more about their key advantages and real-world scenarios.
Role of AI in Predictive Analytics
Predictive analytics are mathematical calculations that predict certain events in the future. In business, they allow you to predict:
- price and quotation levels,
- demand for certain products,
- number of customers on specific days, etc.
When it comes to online business, the most important task of predictive analytics is forecasting the behavior of website visitors. This allows you to personalize web pages according to their needs and requirements by developing unique content, functional elements, and commercial offers.
AI in predictive analytics significantly increases the efficiency of such forecasts. Self-learning models can form and test various hypotheses, identify patterns, and build and optimize mathematical models. Self-learning models perform billions of operations per second, which far exceeds the potential of the human mind and the power of computer programs of previous generations.
AI for predictive analytics makes it possible to perform all the necessary calculations in real time. The program can evaluate a visitor's characteristics, assign a visitor to a certain group of potential customers, and transfer data to other components of the IT infrastructure in a few minutes. Thus, when a user follows a link, the website is rebuilt at the moment of loading, changing the structure, and selecting the necessary text and multimedia content.
Of course, the application of AI may not be so large-scale. Sometimes, it is assigned much simpler tasks, such as determining the proper discount amount or generating an attractive call to action. This simplifies decision-making and monitoring the effectiveness of marketing campaigns.
AI and predictive analytics are often associated with a popular marketing campaign optimization technique — A/B testing. It consists of testing hypotheses on a limited target audience segment in real conditions. In our other article, we provided several cases of its use by brands from various industries, including Airbnb and Netflix, to optimize websites and landing pages. These examples prove that sometimes, even changing one word in a CTA can increase conversions by 139%. Therefore, regular formation and validation of hypotheses is the key to success.
A/B testing is used for additional training of artificial intelligence. By testing hypotheses, you collect the necessary statistics and improve forecasting accuracy by optimizing mathematical models. This allows you to improve the results of subsequent marketing campaigns. However, this is only possible with a thorough and consistent approach to each A/B test.
As A/B testing fans and insiders, we at Claspo have developed a template that will guide you through all the steps of this process and help you get meaningful results for your strategy. Plus, this template is suitable for businesses from different industries and can be applied to validate any hypotheses. Use it as a cheat sheet for all your future experiments and join the ranks of successful cases from the article mentioned above.
Benefits of AI-based Predictive Analytics
According to Venture Beat, 84% of large businesses already use AI for predictive analytics in marketing, and 44% make strategic decisions based on mathematical models built by artificial intelligence. They most often use AI to identify the needs of website visitors and the likelihood of customer outflow to competitors. Why are market leaders so unanimous in choosing new technologies? Let us tell you more about the benefits they get from artificial intelligence.
1. Improved accuracy
Research by V500 Systems shows that predictive analytics using AI increases the average accuracy of calculations from 80.6% to 98.1%. Imagine if you could attract and retain 17.5% more customers. In a large business, this means millions or even tens of millions of additional dollars in revenue.
2. Optimization of business processes
An Accenture report shows that using AI-based predictive analytics for retail has reduced working time by 40%. This applies to all specialists involved in specific business processes: managers, marketers, advertising agents, pricing specialists, etc. According to the consulting agency, this will increase the profitability of large corporations by 38% over the next five years.
3. Building a positive reputation
Personalization of websites, marketing campaigns, and commercial offers significantly improves the experience of any interaction with a brand. According to Demand Sage, 78% of customers are more likely to recommend a brand to their friends if it offers customized content. Therefore, artificial intelligence can be the key to increasing customer loyalty and retention.
Practical Use of AI in Predictive Analytics
We have already noted that predictive analytics and AI are primarily used to predict online user behavior. Various software solutions can be used for this purpose, including off-the-shelf services and complex self-created systems. They usually work with a standard set of data: information from cookies and Internet providers, website behavior tracking, registration forms, and CRM records.
However, the result will depend on your needs and your chosen settings. Let's consider real-life scenarios in which artificial intelligence can be used.
Personalized recommendations
No matter how unique people are, there are common patterns in their behavior. In e-commerce, these are purchases of similar goods; in SaaS, this is the choice of the same web service pricing plans.
Applying AI in predictive analytics allows you to create customized offers and get a higher conversion rate. In an online store, it can be a discount on car polish if you buy motor oil, and in SaaS, it can be a personalized subscription with the best price and set of functions. A great example is GAP, which increased the click-through rate of product recommendations by 50% and increased the company's profitability by 40 times thanks to artificial intelligence.
Want to make your offer as effective as possible? Don't stop at a single block at the bottom of the page; show it in a pop-up window. Soon, we will add the ability to show personalized product recommendations on your site. Spoiler alert: it will be simple and quick, just like any Claspo solution. So stay tuned for updates and news in our newsletter.
Personalized marketing campaigns
We've already discussed commonalities in human behavior, but now it's time to examine the differences. Each segment of your target audience will respond to different messages. For example, you sell action cameras. One segment of your audience will respond better to a campaign that describes their capabilities during sports or travel. In contrast, others will be engaged if the campaign focuses on their use as high-quality car DVRs.
An example of an AI application in predictive analytics would be determining the characteristics of website visitors to generate personalized offers. You can select different calls to action and even multimedia content such as photos and videos.
Nike managed to implement the idea of personalized marketing campaigns, increasing sales of goods through mobile applications by 60%.
Claspo allows you to display personalized widgets based on previous interactions with your brand. For example, you can configure your widget to be shown to visitors who came to your site from a specific campaign, communication channel, or traffic source.
Moreover, if your ad was displayed for a specific keyword in the search engine, the widget may appear only for those who came to the site from that ad. This way, Claspo provides a consistent omnichannel experience, shows your personalized message to each segment, helps visitors find what they came to the site for faster, and increases the likelihood of a purchase.
Optimization of marketing campaigns
Not all valuable data lies on the surface, waiting for you to notice it. Some patterns can only be detected by artificial intelligence, which can quickly perform calculations and test even the most improbable assumptions. A significant advantage is that artificial intelligence analyzes information in real time. If your audience's preferences change, you receive this information in time. It allows you to develop perfect scenarios for your marketing campaigns, significantly increasing their effectiveness.
For example, AI-powered predictive analytics determines that certain pages usually serve as exit points. In this case, your task is understanding what makes them leave and trying to keep them. This can be easily implemented with Claspo widgets. They can appear on the selected pages in case of exit intent and offer visitors a discount, special terms of cooperation, or easy ways to contact your support service. To understand what really motivates the audience to stay on the site, test your messages and offers using the A/B testing option in Claspo.
Choosing the best communication tactics
You'll agree that it's always nice when a company representative understands you from the first word. When you communicate on the same wavelength, problems are solved much faster, and customer service calls leave a pleasant impression.
To achieve such a communication level, you can combine predictive analytics with another AI-based technology: chatbots. Having information about customers' needs, problems, and preferences allows them to immediately choose the right communication tactics and tone of voice. An example is the GrandStay Hotels hotel chain. Connecting AI-based chatbots to communications reduced the workload of call center employees by 72%, reduced the number of lost customers by 55%, and improved the average service quality score by 15%.
However, if the client still wants to talk to a company representative, give them this opportunity because a quick and convenient solution to their issues increases the likelihood of a purchase. Claspo widgets can offer a callback option or an instant messenger list for quick contact with the support team. This option does not replace the chatbot but can complement it. For example, a widget may appear if the visitor views several site pages but does not proceed to the purchase or the dialogue with the chatbot.
Optimizing every detail
The combination of AI, predictive analytics, and A/B testing makes it possible to question the old saying that there is no such thing as perfection, although you should strive for it. The artificial element helps to make your marketing campaigns perfect by optimizing the most minor elements.
We all know that conversion mainly depends on the call to action, the compliance of the commercial offer with market conditions, and the color scheme of the banner or pop-up. But have you ever wondered how the shape of a pop-up affects it? How many new customers can you get by increasing the size of a button by 10%?
Predictive artificial intelligence can answer all these questions during A/B testing. It learns on its own, so you don't have to set complicated tasks. The program will test all possible hypotheses — even those that may seem absurd and ineffective. Each new test will improve forecasting accuracy and make more rational decisions. In a situation where it takes months for a marketing team to optimize advertising campaigns, AI will do it in a matter of days.
With Claspo, you can easily put AI-retrieved data into practice. Our intuitive editor allows you to make all the necessary changes to your widget in minutes: change the size and color of any element, add branded images, adapt your message to the preferences and expectations of the target audience, modify the CTA button and its location, switch between layouts (i.e., forms) of the widget during editing.
Do you doubt the correctness of artificial intelligence's decisions? Use Claspo's A/B testing feature to check all proposed solutions in real-world conditions and track the progress of your experiments with our built-in analytics.
