When you market a product or service to clients, it’s difficult to know who’s being reached and whether they’re likely to respond to your message.

But what if you could predict which of the people you contact are more likely to respond? In that case, you could save time and money marketing only to those who might respond to your communication, rather than those who’ll simply discard or disregard it.

This is the idea behind predictive analysis – which is rapidly becoming a widely used marketing tool. One way of expressing predictive analysis is with a lift diagram.

A lift diagram is a way of representing the benefit of targeting your marketing audience. In doing so, you might contact less people but get more return compared with randomly contacting potential customers – forming a curve, or ‘lift curve’ when represented on a graph.

From the above example, we can see that when customers are specifically targeted, the return on investment rises quickly, then declines as more customers are contacted with less chance of responding positively (the green line). From a perspective of maximising profits, it’s actually better to stop after you’ve contacted around 25 per cent of customers.

However, predictive analysis can help you meet other business objectives. If you’re looking for max exposure on your business without losing money, you can see from the lift diagram that it’s best to stop after you’ve contacted about 70 per cent of customers.

When customers aren’t targeted, costs outweigh return and you end up making a loss (the black line).

Now we know the lift curve exists. But how can your business harness this potential to increase sales and reduce profits? By bringing together all the information you know about your customers, their buying behaviour and how they’ve responded to previous campaigns, you can rank them on which are most likely to respond to marketing – and contact them first.

The bottom line for your business is that raising the lift curve through predictive analytics can increase your profits and decrease your spending on contacting customers.