• by Jon Mandel , September 18, 2012

Customer loyalty has been at the very heart of advertising for decades. Good advertising gets consumers to remember the brand or product when it’s time to make a purchase. Great advertising means they’ll buy the brand now and well into the future, creating a sizable return on investment for that ad campaign.

But as everyone knows, it’s been difficult to actually predict that return when planning a campaign. I’ll spare you the famous “50 percent” cliché, because those days are over. With all the available data at hand, there’s no reason why we can’t predict sales based on advertising spend in the future, or even right now.

Brand loyalty is at the very heart of this proposition. As advertisers make better use of the available data, they are able to spot which consumer base provides the greatest return over the course of a relationship with the brand, and then target that group with precision.

Too much of advertising, online and in TV, is focused on short-term gains. Brands need to look at the long-term implications. It may very well be cheaper to target an audience that is going to make a one-time purchase. Or, it may be better to bring in more consumers who spend less initially, but who build longer relationships with the brand, and on a lower cost-per acquisition/ better lifetime value basis.

Brands need to start with their customer data, and build out from there. They must highlight the segments they want to go after, and then study those that turn into brand loyalists. Armed with scientific proof of the audience most likely to respond and how they respond, brands can turn their advertising up or down to increase their results, which means, yes, we can actually predict purchases and ROI. It is now possible to change ROI from CYA for the past actions you took into a real business lever through accurate, repeatable, predictive ROI. This knowledge extends beyond just future ad campaigns. Predicting future purchases affects your production, shipping, and retail efforts, minimizing wasted spend throughout the organization.

Start leveraging the data to find brand loyalists today, and you’ll have a pretty bright future.

Jon Mandel, CEO, PrecisionDemand