Social Media Analytics: Predictive Analytics

predictive analyticsPredictive analytics have been around a long time in finance and economics.  Slowly, these analytic tools are finding their way into the marketing and social media arenas.

What are predictive analytics?

Predictive analytics use data regarding past behaviors to predict how individuals will behave in the future.

For instance, your credit score is a predictive model including your repayment history and other information to predict whether you’re a good credit risk or not.

Predictive models commonly include a number of variables, such as # of late payments, and weighting factors that reflect the importance of that variable in predicting future behavior.  These are commonly regression-type models.

Modern predictive analytics use similar data and build similar models to predict how groups of people will behave, in general, or classify individuals into such groups.  For instance, we might build a model that predicts how much of a product we’ll sell if we lower (or raise) the price.  While we won’t be able to predict WHO will buy at the new price, we really don’t care.  We only need to know if we’ll sell more at the new price.  Thus, predictive analytics help us determine which marketing strategies will produce the best ROI (Return on Investment).

How businesses use predictive analytics

Businesses use predictive analytics in a number of ways, such as the one discussed above.  In addition, a number of tools, such as CRM (Customer Relationship Management) use predictive analytics to determine marketing strategies. Another type of predictive analytic is CLV (Customer Lifetime Value) which uses purchase information to classify customers into groups and determine the level of profit reflected by each group, which is used to build marketing strategies to each group.

Descriptive models and predictive analytics

Descriptive models are often overlooked as tools for generating predictive analytics because they suggest strategies that will generate better results without being able to quantify how much better the results will be.

An example is the TRA (Theory of Reasoned Action).  This model states that buying behavior is impacted by a consumers attitudes and beliefs about the products, as well as the norms related to that purchase.  This theory, of course, underpins how social media works. Social media helps build attitudes toward products based on the most credible sources — our friends — and establishes norms of behavior when we see all our friends buying the product.

So, why aren’t these descriptive models used more frequently in businesses.  In part, that’s due to poor exchange between businesses and academics who seem to speak different languages.

Predictive analytics and social media

Marketing in general, and social media marketing in particular, are not heavily influenced by predictive analytics.  Although, that’s changing as supercomputers allow organizations to use massive data captured during transactions to build predictive models of what consumers buy and factors that impact their purchases.

Still, relatively few companies use predictive analytics to drive marketing strategy.  Sometimes, when I pitch to prospective clients, I’m shocked at how few demand any true analytics from their agencies and almost none even understand the concept of predictive analytics.  If the agency provides any analytics, it’s commonly simple ones such as # of Fans, # or RT, or other somewhat meaningless data.

Agencies and in-house marketing employees often develop simple correlations as a way to build social media marketing strategy.  For instance, they might notice that certain types of content drive more engagement or that posting at certain times generates more engagement, so they do more of this.  But, this lacks to depth of understanding necessary to build predictive analytics.

I have several proprietary predictive analytics tools I use to help clients optimize their ROI.  For instance, I have a complex algorithm (model) to help businesses generate leads for the sales force from their email marketing programs.  In other cases, I build predictive models from scratch or use descriptive models to generate predictive analytics, such as my hierarchy of effects in social media.

Hausman and Associates

Hausman and Associates publishes Hausman Marketing Letter and the monthly email newsletter of the same name.  We also provide cost-effective marketing and social media through our virtual agency concept.  We welcome new clients and would happily provide a proposal to show you how we can make your marketing SIZZLE with predictive analytics.

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Handling Customer Complaints is Critical for Business Success

 Cox VIP Tent at Celebrate FairfaxHandling customer complaints is a critical factor determining the long-term success of your business.  And handling customer complaints quickly is more important now than ever before because customer complaints spread so quickly though social networks.

You work hard to attract customers — keep ‘em

When customers complain about your business, you have a small window to fix the problem or loose them forever.  Estimates suggest it costs between 4 and 6 times more to attract new customers than to keep existing customers.  Others cite figures as high as 10 times the costs of keeping an existing customer is closer to the actual cost of replacing that customer.  So establishing procedures to handle customer complaints should have a high priority and employees should commit themselves to implementing these procedures on a consistent basis.

If you want further evidence on how important it is to handle customer complaints, look at this from Gallup on the Constant Customer:

Today, the search for the ties that bind customers to brands has taken on fresh urgency. The equity markets are volatile and venture investors are chastened, so loyal customers represent a company’s best prospects for pumping capital into a business. Unlike stock appreciation, which can fluctuate wildly over the short and medium term, loyal customers can be counted on to build a solid base of revenues as well as to expand profits

Customer Complaints Damage Your Brand

When customers complain about you, those complaints can end up anywhere and stay online forever.  Sure, you can hire a reputation management firm or try to fix the problem in-house, but you’ll never get rid of the customer complain — all you can do is hope to dilute the effect of the customer complaint.

Not only will customer complaints filter to the top when customers search for information about your products and services, when customers complain in social media it forms a bad image of your product for everyone who reads the customer complaints.  You never enter their consideration set — the group of brands consumers view as possible solutions to their problems.  Instead, you end up in their inept set — those products considered to be shoddy or otherwise unsuitable alternatives.

Whatever image consumers form of your brand is likely difficult to change — even if that image is inaccurate.


The Best Solution is to Avoid Customer Complaints

Obviously, the best solution is to avoid customer complaints.  A service audit and developing service standards goes a long way toward eliminating customer complaints.

Sometimes, you can avoid a customer complaint.  In that situation, its important to handle the customer complaint as quickly as possible.  This means scanning your social media to uncover customer complaints and making efforts to solve problems quickly.  Using this advice, a student complained on the firm’s Facebook Fan Page.  Her complaint resulted in a call from corporate with an offer to solve her problem.  Instead of spreading her complaint, she posted an update praising the company for its prompt solution.

We had a similar situation last night with Cox Communication.  We attempted to switch from Verizon (where I’ve had numerous problems — but that’s another story for another time).  I wanted to switch and, seeing a booth for Cox Communication at Celebrate Fairfax, we stopped in.  Unfortunately, they had some problems with their phone center and 45 minutes went by.  We didn’t want to miss the Bangles, so we started walking out.  The sales person asked if she could walk with us and complete the transaction.  Not only did she make sure we got to the main stage in time for the performance, she invited us to enjoy the show from the Cox Communication booth overlooking the stage. We had great seats and we got a gourmet meal and bar to enjoy while we watched.

When I thanked the Cox Communication’s management for hosting us, they simply said they were happy to have us as customers.

Today, instead of Tweeting complaints about Cox Communication, I Tweeted a thanks for taking great care of us last night.  Instead of sharing my frustration on Facebook, I posted pictures from the Cox Communication VIP tent.  What a great experience and everyone wins.

Too often, businesses use box seats at sporting events and concerts or other VIP opportunities to host company management or managers from other firms.  It’s important to remember that your customers are your most important asset and, while employees should be invited to keep moral high, inviting customers pays huge dividends, too.

If I ran Cox Communications, I would use the power of social media to increase customer loyalty through events such as their VIP booth at Celebrate Fairfax.  I would host a contest on my Facebook Fan Page so that everyone who likes Cox was entered for a chance to watch the Bangles from the VIP tent.  I would post pictures from the event on the Fan Page.  I would invite other customers to post their own pictures from the event.


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Marketing Productivity in Social Media

Cherie Tripp Lejeune On the road, hope this is the wall for questions– stats for measuring Social Media hits one platform but how productivity is impacted–not good– yes biz w/sales can argue but I think SM is redfining productivity–what do you think and, how do we see the future re this value?

D Steven White Is your contention that SM makes us more or less productive? IMHO, there are logical arguments on both sides of that debate. SM is redefining connectivity (24/7) and inbound marketing is redefining marketing/advertising efficiency and effectiveness (targeted campaigns and metrics). The future value is in location-based micro-targeting (p-marketing) via social and mobile marketing. Will have to see if SM makes makes us more productive or less productive as marketers.

Military Historical Tours

Cherie, It depends on how the tool (Social Media Marketing) is being used or abused.The real secret behind effective Social Media Marketing is leveraging

…Here are some real world ways, examples and links to 3 of the ways that Social Media is being used to increase productivity plus a few links to bonus resources:

1) Joel Comm amongst others uses Twitter as a Help Desk or Instant CRM Tool. Productivity can be greatly increased and other benefits can be gained


* Listening to your customers or potenial customers’ pain and frustration before it becomes a complaint.

* Providing instant soluions to simple or common problems.

* Overcoming last minute sales objections, thus moving a potential buyer through the sale process faster.

If you really want to leverage your productivity, why not Tweet a question asking your happy new buyer to “Please record a short video sharing exactly why you chose your comany name and what benefits he’s getting from your product name that makes your life better and post it to YouTube – then you can link the video on YouTube to your web site for additional free traffic, credibility, and authority.

Read More: By John Jantsch

2) Best Buy has perhaps one of the best examples of leveraging Geek Squad, the web site, Best Buy’s knowledgeable customers and Social Media through the Best Buy Community (i.e., forum) located at:

Here Best Buy invites you to “Join our conversation about technology and life integration. Ask questions, exchange ideas, leave your opinions and share tips with other technology users.”

Best Buy even leverages this tool further by employing Twitter(Twelforce), Facebook, RSS and mobile marketing to make it even easier for you the user to get help.

The founder of Geek Squad, Robert Stevens, said it best in a recent article:

“Geek Squad is really the plumbers of the IT industry,” he said in his
keynote speech at EHX Fall in Long Beach, Calif. on Wednesday, explaining that many IT workers start out helping family and friends.

Whether you have a clogged pipe or a sluggish computer (due to viruses, spyware, and malware) you need a quick effective solution. helps customers find thier solution faster.

3) Dell has been in the media recently because of the way they have

successfully used Social Media Marketing to increase sales dramatically.


The author reveals that Dell has produced $1 million in revenue over the
past year and a half through sales alerts via Twitter. People who sign up to follow Dell on Twitter receive messages when discounted products are available the company’s Home Outlet Store. They can click over to purchase the product or forward the information to others.

So, Dell is increasing direct sales resulting from their Tweets – but more
importantly, Dell is increasing referrals to customers who may never have come to their web site because a Dell believer (i.e., unpaid affiliate) is promoting Dell using thier own resources.

For a few more examples check out these links:

Texas CRB – Using Social Media to Increase Production / TAR Convention,

Galveston TX by Ken Brand

Read more:

5 Ways Companies Are Using Social Media to Lower Costs by Mark Collier

Read more:

What are your best suggestions on how to use Social Media Marketing to increase productivity, increase sales and lower costs?

How are you using Social Media in your organization right now – brag about your success!

What is your number one Social Media Marketing challenge?

Barry C. McLawhorn

Cherie Tripp Lejeune Thank you both Steven and Barry, good information–sorry I could not get back to the conversation today.

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Another Week of Marketing Strategy

As the week draws to a close, I’d like to recap topics in marketing strategy that we covered this week and maybe talk a little about what I hope to do next week.

Much of the week was devoted to branding, in one aspect of another, because of its criticality in successful marketing strategy.

  • I discussed how important it is to know your customers and what they think of your brand
  • I discussed some strategic options for branding, specifically co-branding and dual branding
  • I suggested 5 elements to consider in developing brand names, such as being easy to pronounce, remember, and spell; having positive and suitable associations within your target market, and being culturally transferable.
  • In discussing why you might not need a website, I suggested that a poorly designed website can damage your brand
  • Service failures can also damage your brand

Another element common in last week’s posts was customer relationship management.  An entire post was devoted to tools for CRM, including data mining and relationship building strategies.  These tools are often used, but rarely combines in a company’s marketing strategy — which they should be.  On a somewhat related vein, I discussed how relationships with your employees is an important element of having good customer relationships and avoiding service failure.

In addition to regular posts of marketing strategies and strategic tools, I posted the questions and answers coming from last Friday’s “Ask a Marketing Expert”, which was extremely busy, in an archive.  I plan to do this every week.  Many of these questions related to using social media in your marketing strategy as well as analytics to measure success of these marketing strategies.  This week, “Ask a Marketing Expert” was not well attended, at least in part because most of the academics in my network were attending the American Marketing Association’s Summer Conference in Boston.  Next week we should return to a more normal session of “Ask a Marketing Expert”.  Remember, its FUN … its FREE … its FRIDAY.  on facebook at

What’s a week without controversy and my post from Friday generated plenty.  I suggested that there were 5 reasons a company shouldn’t put up a website and got slammed in my social network.  Take a look at that post and see what you think.  Let me know.

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