As we’ve seen in the 2019 Loyalty Landscape Report, today’s marketers rarely encounter difficulty in acquiring data, but a majority of them face a challenge in finding insight and acting on their data. As brands move to increased personalization and a true single view of the customer, this challenge needs to be addressed.
To learn more about one solution on the market, Custora, Loyalty360 recently spoke with the company’s CEO and Co-Founder, Corey Pierson, whose journey with the company has provided him with expert knowledge of actionable insights for customer-centric brands.
The foundations of Custora go back to Pierson’s time in business school. At the time, his professors emphasized the need for brands to adopt customer centricity, with a special focus on the value of predictive customer analytics.
Pierson found that, among verticals, retail still had a ways to go in making the customer the focal point of analytics. He indicated that, to this day, many in retail are still focused on channel metrics, and this focus can obscure a brand’s view of the customer.
Seeing this need, Pierson set out to develop and market a product that gave businesses access to data and analytics, such as customer lifetime value scores. Initially, the idea was that the product would spare businesses the expense of hiring a dedicated data team. After some initial trials, though, Custora decided it needed to work closely with data science teams.
As such, Custora, when approaching a prospective client, will show the client’s data science team how it can help provide actionable insights. Pierson also noted that, when Custora was founded, it was focused on lifetime value and churn, but with experience, the company learned that marketing campaigns and personalized communications are just one prong of customer experience.
He said, “Part of what’s causing churn isn’t necessarily sending poor emails, but it might be that a customer simply doesn’t like a brand’s product anymore. In more recent software releases, getting at the heart of it, when we see organizations that are really going after loyalty in a more modern way, these initiatives are driven by the customer insights from marketing and CRM, but they’re incorporating stakeholders from other departments now.”
Lucky Brand is one Custora customer who has put this extended functionality to use. According to Pierson, the company’s team has an appetite for insight, seeking to know more about which of its customers are fading and what its good customers are buying. Through Custora’s offering, the brand’s Chief Merchandise Officer can gain insight into which products earn customer loyalty. In addition, the brand’s campaigns have become more targeted and specific.
Asked about the biggest challenge Custora faces, Pierson noted that vendors have to deal with a crowded, active market. “It’s very noisy, as a retailer, to figure out what the heck’s going on in the technology landscape,” he said.
To emphasize its differentiation, Custora bills itself as a Customer Intelligence Platform instead of a Customer Data Platform. This lets potential customers know that its product is not an alternative to products like Google Analytics, but rather a platform for creating and acting on insights. This is why, among other activities, the company publishes reports based on quantitative data.
For example, a recent report from Custora shows that profit, sales, sales growth, and ROI are all significantly higher for companies that use customer analytics extensively than for companies that don’t. Custora has also found through its own research that customers have changed more in the last five years than they did in the 10 years before that, with 20 percent now preferring to use mobile over brick and mortar to shop. This might explain why, in 2017, the number of e-commerce storefronts increased by 40 percent.
Furthermore, in the company’s recent Retail Customer Metrics Growth Index report, it found that increasing customers’ order frequency was the most significant driver of growth. For every 1 percent increase in order frequency, there was a corresponding 2.8-point increase in revenue. This fact was uncovered through multivariate analysis, revealing that it was more important as a revenue growth driver than acquisition, retention, average order value, and reactivation. This kind of research positions Custora as a thought leader in the industry.
However, this distinct function often needs an explanation, as Pierson admits that the company’s offering is in “a category that has yet to be crystalized.” This isn’t because what Custora offers brands isn’t of paramount importance. Rather, it’s because vendors have had to take on new roles and offer new capabilities as the loyalty space has changed. Being a thought leader, which is what Custora is now excelling at, is an example of how vendors need to evolve with the industry. It is interesting to see organizations like Custora taking new approaches to needed innovation and change.