Predictive personalization and micro-segmentation techniques in customer engagement

Personalized marketing relies on predictions of customer behavior that are accomplished by analysis of historical data. Predictive personalization is a marketing approach that is employed by companies to provide genuinely tailored promotions for individual customers, as well as dynamic website variations that are geared towards increasing sales with a targeted customer. Micro-segmentation further drives the effectiveness of predictive personalization using the same data-driven techniques used for larger segments to identify small clusters of customers. These are the customers whose profile combinations have distinct responses to the promotional activities offered at that time. This discussion covers techniques in predictive personalization which should form the backbone of any marketing department in a company that collects and maintains an accurate record of historical customer purchase activity and considers developing a predictive analytics capability in-house as the techniques are not advanced in complexity from those adopted in CRM and other customer data mining applications.