What are algorithms and why do marketers have to understand this?
Predictive models analyze current and historical data on individuals to produce metrics such as scores. These scores rank-order individuals by likely future performance, e.g., their likelihood of making payments on time, or of responding to a particular offer for services – of lapsing their policies.
So, they tell us how to segment our data and who to target when with what product, and their CLV.
It is quite incredible that research shows that only 12% of CEO’s understand what impact data will have on their organizations – and the massive savings predictive models can bring to their marketing efforts.