The myth of the “average shopper” is dead, according to New York City customer analytics startup Custora.
Instead, retailers are better off relying on the mountains of available data to determine just how valuable individual customers are, as well as predict what they’d like to buy next. Not surprisingly, that’s exactly the service that Custora is offering.
This week, the company is launching a new version of its platform, which grants retailers an unprecedented ability to test marketing strategies across any group of customers. It’s an evolution of Custora’s existing technology, and it’s also a sign that data science isn’t just for stuffy academics anymore. The new “marketing lab” tool lets retailers devise experiments — complete with a control group — to test the effectiveness of just about any campaign.
Custora’s extensive customer analytics may sound a bit scary and invasive, but according to co-founder Corey Pierson, it’s where the industry is headed.
“Retailers previously lived in this world focused on the average shopper … and as we started uncovering information about interesting [customer] segments, we found a lot of our clients started to extract some of that information,” Pierson said in an interview with VentureBeat.
The availability of customer analytics tools also means consumers won’t have to deal with as much irrelevant marketing. That leads to less junk mail that you’ll toss instantly and more relevant offers that could potentially save you money.
Bonobos and Revolve Clothing are already taking advantage of Custora’s new marketing platform, Pierson tells me. Revolve Clothing used the marketing platform to target the best customers for its recent catalog mailer campaign, but it can be used to test practically any strategy. Once retailers find a good technique for attracting their customers, they can automatically apply that technique to the rest of their relevant clientele using Custora’s platform.
“The benefit of this is retailers want to be able to reach out to different customer segments in different ways, but a lot of the tools today don’t talk to each other,” Pierson said. “So an email provider may know who’s opening emails, but they don’t know who likes what products. We now expose all of those segments and make it very easy for marketing teams to get access to [them].”
The two-year-old company spent its first year building its technology for deep customer insights, while its second year was focused on helping marketing teams act on those insights. Custora spent the past six months developing the marketing lab tool, Pierson tells me.
The company raised a small round of seed funding around two years ago, but since then it’s been growing revenues steadily. The company is now profitable, and it’s not currently seeking any more funding, Pierson says.
As for what’s next, the company says it will continue to focus on building new tools based on its extensive customer insights.
“If you can predict the long-term value of customers, there are some really interesting implications,” Pierson said. “There’s more room for them to figure out more ways to integrate with the ad buying world, and it has implications for acquisition campaigns as well.”
Marketing strategy photo via Shutterstock