machine learning algorithms

Understanding The Best Machine Learning Models to Use for Marketing

Marketers face a growing challenge of how to build one-to-one, meaningful relationships with millions of customers across dozens of complex touchpoints. We know that customers expect brands to know them on a more personalized level even from their first interaction. Rather than sending out countless batch and blast email campaigns and hoping something sticks, marketers need to engage customers with messaging that makes them feel recognized and valued. 

The pressing need to reap value from enormous collections of customer data becomes increasingly challenging and time consuming as businesses scale and this data becomes scattered and siloed throughout many technologies and systems. The sheer volume of data is impossible for humans to make sense of alone, which is why many companies are investing in machine learning (ML). Machine learning uses algorithms and data models to make more accurate predictions about customer behavior based on a series of patterns and previous interactions. By breaking down large audiences into specific segments and demographics and applying machine learning models to reveal specific customer preferences and attitudes, marketers can better align their actions and campaigns to generate meaningful results and optimize each customer interaction to drive future sales and brand loyalty. 

So machine learning sounds like a magic wand for marketers, but how does it look in practice? We’ll look at how investing in the right machine learning and data technology can enhance marketing performance through improving customer acquisition rates, targeting high value customers and identifying at-risk customers. 

Why Choose a CDP with a Machine Learning Framework? 

Previously, it was challenging for marketers to access the technology and data needed to practice predictive analytics techniques. To collect, analyze and process the enormous quantity of customer data coming in from across multiple channels and regions, organizations often turned to third-party providers. These external data warehouses made it more difficult (and often more expensive) to access customer insights quickly and deploy them as relevant customer experiences.

The Acquia Customer Data Platform (CDP) makes predictive analytics and machine learning technology available to the average marketer through a machine learning framework that allows marketers to apply predictive models to their data and anticipate the best action to take next. All models in Acquia’s Machine Learning Framework leverage Acquia’s unified, cleansed, deduped data in a single profile that is standardized and stitched from any data source. The CDP ingests customer data flowing from across all other systems (like a CRM, ESP, POS, the website, etc.) and brings it together in a unified customer profile. Let’s look at some potential use cases for how each of these different models can be applied to marketing to provide better customer insights and produce results.

Predictions

One of the most familiar purposes of predictive analytics is to anticipate a customer’s future behavior. By observing behaviors over time, brands can more accurately judge lifetime customer value and create more relevant experiences. Here are just a few examples of the types of prediction models the CDP can create: 

  • Likelihood to engage: ML can predict the odds a customer will open an email or subscribe to a newsletter, informing which segments to send certain offers to. 
  • Likelihood to buy: This model predicts if a customer is at the point in their journey to make a purchase. This information is valuable when knowing which users to nurture more and which to offer time-sensitive discounts. 
  • Likelihood to churn: This model identifies at-risk customers so an organization can be prepared for a loss of income or focus on a win-back campaign.  

Personas

The Persona family comprises a series of clustering models. Clustering is an unsupervised learning technique where the machine learning algorithms create customer segmentations based on many different variables. Unlike marketer-made segments, machine learning models can take into account many more customer dimensions. A few types of useful clustering models for marketing include:

  • Product Clusters: Knowing which types of products certain segments regularly purchase helps improve targeted campaign efforts. 
  • Behavioral Clusters: These clusters reveal things like preferred channel, average spend and average time spent browsing vs. buying so marketers can better anticipate how, when and where to engage. 
  • Seasonal Clusters: Many retail brands use seasonal segmentation and data to detect patterns of when customer demand is high for certain products and inform when they start “summer sales” or begin heavily discounting season-specific items like overcoats and snow boots.   

1:1 Personalization

Today’s customers are constantly inundated with new marketing messages from brands, and the influx of new digital touchpoints means that the stakes to create memorable connections and earn customer loyalty are higher than ever. Personalization empowers marketers to create a holistic marketing strategy that covers the who, what, where, when and why of customer experience. Here are some examples of how personalization models can be used to reach the right audience with the right content on the right channel at the right time:

  • Next best product recommendations -the “what” a customer wants to buy)
  • Send time optimization for email campaigns - the “when” customers want to receive messages 
  • Next best channel - the “where” customers prefer to interact with brands 

Some well-known examples of this are Spotify’s personalized “Discover” playlists or Amazon’s “other products you may like” feature. By tailoring an experience to each customer’s preferences, marketers are able to boost up-sells and cross-sells and keep people within their brand ecosystem longer. And as a bonus, the more actions the customer performs on your site or products they purchase, the more customer data is given to the algorithm to continue personalizing their next best experience. 

The Benefits of a Machine Learning Framework 

1. Freedom to Leverage Machine Learning for Any Data Source

Marketers use machine learning models to leverage insights from all available data regardless of the quantity of records. This distinction means marketers can draw more accurate, precise conclusions than if they were only working with models built from a smaller sample of data.

All machine learning capabilities aren’t built equally. Every brand has their own unique goals for how to meet the needs of their audiences. Just like your customers want a personalized experience, the machine learning models you use to build and orchestrate these experiences need to be customized to deliver personalized outcomes. 

2. Configurability and Accessibility 

Unlike common static machine learning models that don’t allow for customized use cases, Acquia’s CDP embraces configurations in machine learning so that brands can adjust models to suit their specific needs. This is accomplished by a layered, robust machine learning framework that allows all teams to directly access, configure and run the tests they want to inform their business strategy. 

3. Explainable ML Models  

Marketers need to be able to understand and trust the predictions generated by machine learning rather than blindly rely on predetermined scoring systems assigned by black-box models. By giving marketing teams direct access to all of their customer data via a CDP and the ability to design what tests they want to run through configurable machine learning, teams will have a deeper understanding of what each prediction means and be able to interpret results into strategic actions. 

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To learn more ways machine learning and predictive analytics can improve your customer experience, register for Acquia Engage and attend Acquia’s Chief Science Officer Omer Artun’s session: Why Predictive Marketing? Why Now?

arnaud prades

Arnaud Prades

Director of Machine Learning Acquia

Arnaud Prades is the Director of Machine Learning for Acquia Marketing Cloud. He specializes in applying data mining and machine learning to fields like customer intelligence, logistics, dynamic pricing or algorithmic trading. He has lived in various countries like France, Spain, Sweden or the United States. He holds a master's degree in Statistics from the Ecole Centrale in Paris and another one in Operations Research from the Polytechnic University of Madrid.