To be featured on Minnesota-American Marketing Association April 3.
You reach into your old board game, past the battleship and the shoe and Community Chest cards, and pull out a smooth white and black-spotted die. You give it a roll. You roll a six. On the second roll, you roll a six again! Perhaps you have the lucky touch?
Before you pack your bags for Vegas, roll once more. This time it’s a two.
Of course, despite what the superstitious may believe, there’s no rhyme or reason to dice rolling. Every time you roll a die, you have an equal 1/6 chance of rolling any number, the same chance as the roll before. However, consumer behavior does not produce results in this same random way. Careful and smart statistical analysis of company data and consumer trends can produce not only insight into how the company is performing, but the ability to play fortune-teller, projecting forward and adapting proactively. No crystal ball required.
Imagine if you knew which consumer demographics were the biggest, and which were growing. If you knew where people were spending their money. Where your buyers and clients were coming from and how they are finding you. Many smart marketers already know these things. But now imagine if you could project and predict into the future, with near-perfect accuracy. This is what research, statistical analysis, and past trend analytics can achieve.
The concept is best illustrated with an example. Recently research of MLS data revealed that condominiums in the past year throughout Minneapolis and St. Paul have outsold multi-family and twin/townhomes combined. Analysis of US Census data and projections for Minnesota revealed that the population of young adults (18-24) was at a 20-year high in 2005 to 2010. Concurrently, the population of children (under 17) saw a 20-year low in 2005. As far as social and cultural trends go, the young adult population is generally marrying and having families later in life. Females especially are receiving higher education and upper-level employment opportunities at numbers rarely seen before, postponing child-rearing. It is also a reflection of the economic conditions, as fewer people, particularly younger populations, are able to afford or receive approved lending for larger single-family homes. This population of young professionals still needs to be housed; thus, the rise of the Urban Condo.
But don’t reach for your wallets and investment savings just yet. The Census Bureau predicts for this area a sharp rise in children and a definite decline in the young adult population over the next eight years. This trend is similar all over the country. Condos are often sitting vacant. In Sacramento, a condo can be purchased for the same price as a car: $24,000. Often these condos were produced by overzealous developers, reacting to a trend, and not projecting forward whatsoever.
There is a great image by SAS which defines a lot of marketing tools currently used, like reports, queries and alerts, as predecessors to statistical analysis, forecasting, predictive modeling and optimization. The latter four are considered to be a new level of competitive advantage and intelligence than the prior three. It is clear that if marketers and business executives can move from past to future analysis, they will achieve new levels of competitive advantage and business success.
Fortune Teller Image Copyright (c) 123RF Stock Photos. Image cropped for size.