Did you know that 24 percent of emails are opened within the first hour of delivery? Knowing that type of information can be the difference between retaining and losing customers and is one of the main reasons that “big data” is all the rage right now in the sales and marketing world.
Big data startup Retention Science is one of the newcomers in the space and announced it received a $750,000 investment from Forerunner Ventures to increase its capacity to bring on more clients. The investment is in addition to the company’s July 2012 $1.3 million seed round led by Baroda Ventures.
“The new financing will enable us to hire more data scientist and improve our models and algorithms,” said Jerry Jao, CEO of Retention Science. “We actually have a backlog of clients that we’re unable to onboard because we simply do not have enough resources.”
Retention Science’s customer retention platform uses big data to analyze and predict consumer behaviors and, based on this data, creates personalized campaigns to help online retailers re-engage customers. Before using Retention Science, Chrome Industries, maker of messenger bags and other apparel, was doing what most companies have been taught about email marketing and realized they were dead wrong.
“We’ve all been hearing this: never send emails on Mondays or Fridays- Mondays you’re inundated, Fridays you’re checked out- send them Tuesday, Wednesday, Thursday, at some point, probably early in the morning so everyone can get to them,” said Kyle Duford, Director of eCommerce for Chrome Industries. “For our customers, we were way off the mark as far as when the most optimized time would be for people to open emails. Our customer is literally 180 degrees from what best practices tell you when to send emails.”
As a result of using Retention Science’s Customer Profiling Engine, which analyzed consumer data to determine the optimal e-mail delivery time for each of its subscribers, Chrome significantly increased click-through rates, on-site activity, and campaign revenue.
Customer retention is an unsung hero of the retailing world, as research shows 80 percent of future profits will come from 20 percent of existing customers. Retention Science trying to for e-commerce what sales people can do on the floor of a brick and mortar store. Just by watching what a person touches or tries on, sales people can offer customers individualized recommendations to increase the likelihood that the customer will buy something and return to the store. The Internet can’t do that without the help of data analytics.
“We’re helping businesses collect data around user behavior,” Jao said. “Because of big data and its availability, it enables us to collect that information and make sense of that information.”
Existing Retention Science customers, such as CafePress, The Honest Company, Chrome Industries and multiple recognizable national retailers (which it can’t yet release publicly), have seen up to 133 percent increases in customer spending and 15 percent in business margin improvements.
Jao is hoping Retention Science will not only continue to grow, but also be the leader in a newly created category coined “retention marketing.”
“You can’t really run a business without knowing what your business is really like anymore,” Jao said. “For a business to really last long and really be profitable, it’s really about retention. Retention should be just as important as acquisition.”