With a flood of customer data and the right CRM to make sense of it all, you might still be wondering about the differences between descriptive, predictive and prescriptive analytics.
- Descriptive analytics
- Predictive analytics
- Prescriptive analytics
These terms have been bandied about in marketing circles for so long that their meaning has become a little blurred over time.
The thing to bear in mind is that each successive phase follows from the one before in that to predict what will happen next (predictive analytics) you need to know what has happened already (descriptive analytics), and to know a course of action to take (prescriptive analytics) you should be working with an informed opinion of how your customers are likely to act (predictive analytics).
Web Analytics Vs. Marketing Analytics
Business owners are most likely going to be focused more on marketing analytics than web analytics per se. Web analytics focuses on things like page load times and the total time that a given customer spent on your website, which can be helpful to know…but indirectly.
What you really want is marketing analytics since these are the business metrics that you likely care about. Marketing analytics are important for two reasons—this kind of data is focused on your customers and, secondly, it looks at how well you're doing with your blog, eCommerce, your overall website, social media, and your email marketing campaigns.
In some sense web, analytics are a bit drier in that they just tell you about things that would be of interest to a webmaster (e.g., load times). Marketing analytics, on the other hand, clue you into the actions and opinions of your leads and loyal customers while keeping you constantly up-to-date on how well you're moving each through the sales funnel.
Descriptive Marketing Analytics
The most basic level of analytics is descriptive marketing analytics. Descriptive analytics tell you what happened using data aggregation (i.e., summarizing a wealth of customer data and marketing trends through statistical analysis) and data mining to help make more sense of what you uncover.
Descriptive marketing analytics give you more information on all of your social media subscribers as well as prospects and leads at various stages of your sales funnel. Descriptive analytics, as you can probably already tell, is a huge field that encompasses an array of marketing channels.
Relevant Business Metrics
For practical purposes, though, most business owners want to know more about how well their website is performing and how they can improve their social media presence.
Descriptive marketing website analytics will give you more information on how well your content marketing is affecting things like traffic, leads, clicks, and page views.
Recalling that descriptive marketing analytics gives you past data and answers the question of "what happened?" Descriptive analytics includes things like your marketing investment across channels and, in turn, the return on investment that your marketing investment in those channels yielded (e.g., social media marketing's ROI for your company).
As descriptive analytics also includes data on your leads, you should be receiving detailed reporting on the number of leads who made it deep into your sales funnel and became customers.
Descriptive marketing analytics go a few steps further than web analytics in that marketing analytics tell you which of your channels is producing the most leads and ROI (e.g., this month's email marketing ROI > social media ROI) and relate that ROI back to your overarching business goals.
Predictive Marketing Analytics
If descriptive marketing analytics tell you what has happened marketing-wise with your leads and customers, then predictive analytics answers the logical follow-up question: what's going to happen next?
It's actually now possible to predict your future content marketing success or the ROI of an upcoming product based on what customers on social media are saying about your brand. Just be careful to focus on what are known as "quality" metrics like high customer satisfaction ratings and positive re/tweets rather than "vanity" (or quantity) metrics like the sheer number of followers you have. (iprospect)
Predictive analytics goes beyond social media, though, and takes a big picture view of your leads. In particular, predictive marketing analytics should give you a very clear idea of the movement of leads in your sales funnel and how likely those leads are to move down the funnel and be converted into customers.
Prescriptive Marketing Analytics are the Future
The predictive phase of marketing analytics can also be thought of as a sequel to descriptive analytics—you've gone from understanding the data to predicting what your customers will do next—and also as a prequel to the third phase of marketing analytics, prescriptive analytics. (ClickZ)
Prescriptive analytics will tell you what to do and provide a playbook for possibly reshuffling your marketing approach, social media presence, lead nurturance, and overall engagement with your customers.
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