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Revolve Clothing uses analytics integrated with e-mails to target individual customers.
Web-only apparel retailer Revolve Clothing coaxes 33% of its one-time customers to become repeat buyers with e-mail campaigns tied to its customer data, says Kobie Fuller, chief marketing officer. Last May, the retailer began integrating marketing analytics software from vendor Custora with its ExactTarget e-mail service in order to automatically send customers messages based on their individual profiles, he says. “The e-mails we send out through the platform have very high open and click-through rates,” Fuller says, declining to reveal those exact rates.
Custora’s web-hosted software allows Revolve Clothing to dig through its customer records dating back to 2003 and classify shoppers into marketing segments based on their purchasing histories and web behaviors, Fuller says. “It’s automating calculations on all that data so we can see very quickly the key business metrics valuable to us,” he says.
One metric the software estimates is customer lifetime value, which helps the retailer flesh out who its best customers are and which ones it is on the verge of losing. Custora calculates this by collecting information about individual shoppers, such as frequency of purchases, average spending and product preferences, then compares their profiles to those of other customers. That way the software can predict that a customer will be among a retailer’s most loyal when, for example, she makes her second purchase within a month of her first, just like 90% of the retailer’s other most loyal customers, says Custora CEO Corey Piersen.
“Likewise, if a customer has been making an order every month for six months, but suddenly misses two, the models can say, ‘we've seen this type of behavior before and, 50% of the time, the customer never returns—this person is at risk of leaving,’” he says. “On the flip side, if an annual shopper misses two months, it's just par for the course.”
With the e-mail integration, Revolve Clothing can set ExactTarget to fire off certain e-mails to customers any time they meet specified criteria, such as time since last purchase and estimated lifetime value, Fuller says. The retailer’s next plans are to personalize the e-mails it sends individual customers based on what Custora knows about their unique histories and behaviors, Fuller says.
“Predictive relationship marketing platforms, like Custora, help retailers transform their marketing programs to match what individual customers are likely to want or need next, replacing the old batch-and-blast approach that so many e-mail marketers have had to rely upon with lists,” says Rob Brosnan, an analyst at Forrester Research Inc. “This data integration capability gives them the ability to assemble a much richer customer profile and to produce deeper customer analytics as a result.”
Unlike an e-mail service provider which measures limited customer data, mainly interactions with e-mail messages, Custora can incorporate other information about customers, like their purchasing frequencies, into its marketing analyses, Brosnan says. That helps it determine, for example, the optimal time to pitch another product to a customer who bought yesterday, he adds. “A web analyst wouldn't think of Custora as a replacement for a web analytics tool, but an e-mail marketer, direct marketer or even a media buyer would see it as a far more important source of insight when designing customer acquisition, cross-sell or retention programs,” he says.
The software is designed to be used by business managers without technical skills, Fuller says. Revolve Clothing began paying $1,500 per month for Custora, but now pays slightly more because it has upgraded the service to handle more data sources about customer behavior and to present reports in more detail, he says.