If you're only looking at credit risk you're not being marketing savvy

We all have that one friend or family member who we'd be a little hesitant to lend some money. On the other hand, there are those family members or friends who we'd give a loan in a heartbeat.

So, what informs our decisions to open our wallets or not? Information. In being a friend or family member you have enough knowledge about the person to know whether or not they're going to repay the money as promised. And this is where it gets complicated because someone who may appear to be rather financially irresponsible from the outside may actually fiercely loyal and reliable, so you'd lend them money feeling confident that they'll pay you back.

For businesses identifying who to target as part of your advertising and marketing strategies all comes down to the same thing - knowing your customer. And this doesn't just mean knowing them on the surface, the more information, and knowledge, you have about your potential customers, the better. It goes beyond just assessing their credit rating.

If you're working with a limited marketing budget, you simply can't afford to spend money attempting to target the "wrong" people, says CEO of Effective Intelligence (EI), Julian Ardagh.

Some marketers will present you with large quantities of potential customers but this is a bit like tossing your campaign into a large crowd of people and hoping that it hits the right people. "Sure, you may have a few positive responses but wouldn't your money be better spent were your efforts more targeted? That's where predictive analytics comes in. By allowing businesses to find and quantify hidden patterns in the data, they are able to forecast future events."

Using data from our extensive marketing database predictive analytics helps us identify the customers who are most likely to respond. We break down customer into four categories:

* The Absolutes: These are the customers who would've bought your product regardless. Their purchase decision is in no way influenced by your campaign.
* The Agitators: Agitators have a negative response to the campaign; possibly because the campaign doesn't speak to their needs and preferences as a customer.
* The Quitters: These are the people who would never have bought your product, with or without the campaign.
* The Convincers: Convincers had a positive response to the campaign and were convinced to buy, or renew, their relationship with your brand. They wouldn't have done so if the campaign had not been run.

"The Convincers are the customers savvy marketers want to speak to. Simply looking at a customer's credit risk only tells part of the story," notes Ardagh.

"Using our insight-driven methodologies, we give businesses the opportunity to have real, personal relationships with their customers," concludes Ardagh. "Brands must engage with their customers as individuals. This boosts profitability, increases customer loyalty and makes it possible to offer customers superior experiences."