In the last post, we examined the output of an S-ARIMA-based prediction. Let’s now dig into the most important part of predictive analytics: planning and acting.
The Power of Predictive Analytics
The power of predictive analytics is our ability to forecast with greater accuracy and specificity than generalized, “gut instinct” predictions. We know when something will happen and the magnitude of it.
However, none of this incredible power means anything if we fail to act. If we build a predictive forecast that sits in a desk drawer or at the bottom of our email inbox, then our power is wasted. We may as well have done nothing at all and played video games or watched Netflix instead.
Before you create a predictive analytics forecast, ask, “Will we actually use this?”. If the answer is a resounding yes, then proceed. If the answer is anything but yes, find out why.
- Did we not establish the credibility of the forecast?
- Did we not establish the output of a predictive forecast?
- Did we not establish the value, the outcome, of following a predictive forecast?
Interpreting the Predictive Analytics Forecast
Let’s look at a typical predictive analytics forecast and see how we might interpret it. We’ll use search volume for “add Google Analytics”, a search with intent. Someone searching for this term is likely attempting to install Google Analytics for the first time; veteran marketers know the process.
How do we interpret the graph above? In the version of predictive analytics forecasts I use, I create two charts. The first are actual values, reflecting the range of metrics. This is important to know, because we want to know how much variance there is in a metric. A metric that jumps from 0-100 is a big jump; a metric that jumps from 65 to 66 isn’t.
The second chart is made of scaled values. These values are the same data as the first chart, but scaled to a 0-100 scale. This helps understand the magnitude of change for narrow variance charts, and also provides a helpful way to index how much change is happening at any one time.
To interpret the charts, we use the MAISTER cycle framework from Marketing Blue Belt:
- Measurement: (the chart)
- Analysis: what happened?
- Insight: why?
- Strategy: what’s the big picture goal?
- Tactics: what should we do?
- Execution: how will we do it?
- Review: did it work?
When we look at the chart above, the first thing that leaps out is that search volume for “add Google Analytics” peaks the week of February 25, 2018. That’s what happened, the analysis. The critical question we need to answer is, why, the insight? What’s special about the last week of February?
Investigating using tools like Google News, we find that a number of small businesses start at the beginning of the year, and by the time February rolls around, those businesses have finished with the basics of incorporation and are beginning to build out infrastructure – like a website, and therefore implementing Google Analytics.
What strategy might we build from this insight? If I were managing the marketing for Google Analytics, I’d be sure to design a first quarter campaign initiative around measuring success for small businesses as my strategy, with a goal of increasing adoption of Google Analytics – and convincing businesses to install it sooner rather than later.
From strategy, we’d identify tactics, from workshops and webinars to Google AdWords and more, all targeted to reach the small business population.
After tactics, we’d focus on execution. This is where predictive analytics – and its specificity – shines. At a well-run organization, we should know how long it takes us to prepare an ad campaign, a PR campaign, an email marketing campaign, etc. When we know the key dates we must hit in order to take advantage of maximum customer interest, we then build workback schedules.
In the above example, if we know we must have everything in market by February 25, 2018, and we know it takes 3 weeks for our advertising and creative teams to build an AdWords campaign, we’d need to begin the build process no later than February 4, 2018.
After we executed the campaign, we’d review it to determine the results. Did we achieve better results in 2018 than we did in 2017?
Plan and Act
The most important thing we can do with predictive analytics is to plan and act with our findings. Never let predictive analytics forecasts collect dust. Take action with them, and once we do, we will reap enormous value from them.
You might also enjoy:
- How to Set Your Public Speaking Fee
- The Evolution of the Data-Driven Company
- Best Practices for Public Speaking Pages
- How to Set Your Consultant Billing Rates
Want to read more like this from Christopher Penn? Get updates here:
Get your copy of AI For Marketers (2019 Edition)