Both Forrester and Gartner now assert analytics has become an essential competency for marketers. But a complex marketplace with even more complex underlying technology still keeps many marketing leaders up at night, according to the research firms.
Those marketers will take little comfort then that the latest advice is to merge the insights from both predictive and prescriptive analytics tools to speed up decision making.
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A Gartner CMO survey found around one in every $12 CMOs spend is devoted to analytics but confidence in their purchases is lagging other areas.
“Marketing leaders invest a lot in analytics, but marketers’ confidence in analytics is trailing all other marketing activities,” says a 2019 Gartner report on how to apporach purchasing analytics tools.
Gartner now urges marketers to take a more structured approach to analytics purchases with considerable involvement from the data science teams in order to make the right buy and fully leverage the technology.
Meanwhile, a Forrester survey of analytics professionals found nearly 90 per cent of organisations are using predictive methods to anticipate customer behaviour, up from 79 per cent in 2017. But challenges around data quality and management are “abound”.
“Despite increasing maturity across the board, companies still face menacing data challenges for their measurement and analytics groups,” Forrester authors write in The State of Customer Analytics 2018, listing data issues, a lack of data scientists, and “fractured” relationships between business and other functions as the main culprits.
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Forrester says despite the challenges, overall, sophistication continues to rise and “unlike in years past, a good portion of customer analytics laggards have graduated to the follower category”.
Hype around analytics continues to evolve but has just about peaked, according to market analysis from Gartner. Last year predictive analytics moved past the peak of inflated expectations, now beginning its descent into Gartner’s “trough of disillusionment” but still expected to drive high benefits over the next two to five years and help organisations “mature beyond descriptive and diagnostic analytics”.
Prescriptive analytics (tools more concerned ‘what should be done’ rather than predictive’s ‘what is likely to happen’) has hit peak hype, according to Gartner, which forecasts the prescriptive analytics software market will reach $1.88 billion by 2022, with a 20.6 per cent CAGR from 2017.
Merge predictive and prescriptive: Gartner
Turning analytics outputs into customer insights will require combining both predictive and prescriptive methods, according to Gartner.
“Some industries — such as manufacturing, logistics and transportation, financial services and pharmaceuticals — have long incorporated predictive and prescriptive modelling into their processes,” Gartner researchers write in a report on the topic.
“Too often, however, predictive and prescriptive capabilities are isolated and trapped in specific specialised departments, instead of being combined and exploited across the organisation.”
Tying the strategic insights of predictive with the execution of prescriptive is now a core competency for digital businesses, according to the authors.
“The value proposition for analytics comes not only in predicting what will come, but also in responding in a way that drives specific, directed action which has an impact consistent with the business objectives.”