eSalon: Using real-time LTV to measure how discounts impact profitability


• 0.2% Increase in gross profit from one campaign

• 12X faster results (2 weeks for results vs. 24 weeks for results)

4 weeks to see positive ROI from software

The Challenge 

As an eCommerce operator, you might have considered offering a discount to acquire new  high-value customers. However, have you ever wondered if discounts could potentially turn  away your best customers? That's exactly what eSalon, a fast-growing Beauty brand faced.

Not every customer is created equal. 

A small percentage of customers generate an outsized portion of profits. 

Profitability is the north star metric for consumer brands, but it takes months to measure  the value or quality of a customer. In contrast, marketing decisions are made on a daily and  weekly basis. 

eSalon was about to launch a 30% discount as a means of getting their most valuable  customers to spend more, but they wanted to ensure that their marketing decisions are  based on profitability, not just on acquisition. 

Before scaling, they decided to A/B test using real-time LTV as the success criteria.

The Solution 

Using Ocurate’s highly accurate predictions, eSalon segmented an audience of approximately  1,800 high-value customers with a high churn probability. 

They performed a random split to build two groups, with 50% of the audience in a control  group and 50% in a treatment group. 

Then they sent two emails to the treatment group, one on January 6, 2023, and another  reminder email on January 17, both containing a 30%-off discount, while the control group  received nothing. 

When the experiment concluded, Ocurate analyzed the results and concluded there was no  statistical significance in the two audiences.

These results indicated that the discount offered by eSalon stimulated new purchases, but the effect of the discount for each new purchase reduced the profitability of items  bought with the discount code. Therefore, not rolling out the discount to every customer  in that segment over the next 12 months will save the company an estimated $64,011.36. 

Ocurate showed that eSalon could increase revenue at a lower cost which would translate  to a 0.2% increase in gross profit from this one campaign. 

In less than two weeks, they got conclusive results that would have taken them at least  six months to measure without using Ocurate. The time saved helped them accelerate their  experimentation roadmap and move on to other areas of their buyer's journey that can be  optimized with real-time LTV: landing pages, offers, paid media, product recommendations, and more. 

How it works 

Ocurate empowers consumer brands to accurately predict customer lifetime value (LTV) in  real-time. Our platform leverages transaction data, email engagement, and website activity  to deliver 90%+ accuracy in LTV predictions. 

We use a unique approach to build predictive models that are tailored to each brand's products, customers, and buyers' journey. By placing a pixel on the brand's website, we analyze millions  of data points tied to consumer behaviors such as time between order-to-cart and checkout, items clicked on, and mouse movements. 

Using this information, we compare the buyer's journey of website visitors to that of high value customers to make predictions even before a transaction. Our model takes about 30-60  days to learn from these behaviors and analyze real-time event stream data, including email  engagement and website activity combined with purchase data. After 60 days, predictions  evolve from weekly to real-time. 

We seamlessly integrate our predictions back into existing workflows and tools through an API, allowing for better segmentation of campaigns and more effective testing.

With Ocurate, consumer brands can make data-driven decisions and optimize every touchpoint  for the best customers.

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