Researchers and brands are realizing that there is a science to our spending habits.
In Santa Monica, a group of technologists founded a company called Retention Science to better understand buying behavior. It’s building analytics tools to pull together reams of data and provide retailers with the insights to attract big spenders.
Today, the startup raised an additional $750,000 from Forerunner Ventures, which will augment its $1.3 million seed round from July 2012. Forerunner Ventures is a recently launched, all-women venture firm that specializes in e-commerce. Managing partner Kirsten Green will join Retention Science’s board of directors.
“We hold the pursuit of delivering an exceptional customer experience in high regard; that is a theme at the center of our investment focus,” said Green.
Green was also impressed with the technology that determines how price sensitive customers are, so online retailers can adjust their promotions accordingly.
Retention Science was able to build this technology in just a few years, as it was selected for the SAP Focus startup program. Startups enrolled in the program receive a free instance of Hana, SAP’s much-hyped database that can store up to 500TB of data and work at high speed. Founders also receive mentorship and advice from SAP executives.
Retention Science is the brainchild of Jerry Jao — it’s his third company in the past few years. Read Jao’s frank advice about why entrepreneurs should pivot here.
Jao believes that the third time is a charm, especially given that Retention Science is building a strong customer base, which includes The Honest Company and CafePress. He claims that the technology is helping these retailers increase customer spending by up to 133 percent.
Jao said he’s received “20 inbound requests” from investors in the past year, but opted to work with Green as she’s previously invested in fast-growing e-commerce startups like Birchbox and Warby Parker. More on Forerunner Ventures’ mission here.
VB's research team is studying web-personalization... Chime in here, and we’ll share the results.