Brands don’t know their customers.
When brands don’t know their customers, they focus on the wrong customers and optimize on the wrong metrics. Brands have spent years acquiring the wrong customers by adopting a philosophy of “growth at all costs”.
When brands don’t know their customer, they send the same promos to everyone, overspend on the wrong customers, invest in the wrong channels, buy ads to bolster vanity metrics, and build the wrong products.
Early solutions to solve this problem have cluttered CRMs with Big Data, but without any clear direction on how this data drives value for each customer at the individual level.
Even worse, a good chunk of this data will disappear as the previous methods to track customers will either cease to exist or depreciate in effectiveness.
Let's think about ways to understand and measure customers today:
- Revenue or new customers? Not all revenue or customers are created equal.
- CPA? CPA may be low, but just because a customer is less costly to acquire does not mean they are the best customer for the business.
- Profitability? A customer may not be profitable today, but extremely profitable tomorrow.
- Net Promoter Score (NPS)? NPS does not take into account the value of customers.
The most forward-thinking companies have started to focus on a single metric as an authoritative solution to these pain points -- predicting customer lifetime value. If brands knew exactly how much revenue every current or potential customer would generate, they would be able to allocate resources with near-perfect efficiency. Many current solutions to model Customer Value fall short because they are built on technology that has gone decades without innovation.
Old Ways of Measuring LTV
The general problems with measuring LTV today:
- Past purchase history alone does not predict future performance
- Measuring LTV...takes a lifetime
- Companies only using data in their CRM
- Walled Gardens are high-performing channels but a black box. Companies can't pull data out of these platforms to gather individual customer insights
The Ocurate Solution: Predicted Customer Value
Ocurate empowers brands to focus on the right customer by predicting value and affinity.
While we are just getting started, we are seeing early indicators that adopting Predicted Customer Value (PCV) optimizes media, narratives, product development, acquisition & retention strategies, and loyalty programs.
Brands that focus on attracting and retaining the most enduring, high-value customers will outperform brands that do not.
- 5% increase in customer retention rates can increase profits from 25 to 95%
- Returning customers generate 3x the amount of revenue per visit
- Conversion rates for repeat and returning customers are 5x higher than first-time shoppers
- 40% of a company’s revenue comes from repeat and returning customers even though they only represent 8% of all shoppers
How we’re different
Ocurate leverages better data and better AI to produce highly accurate Customer Value predictions.
- Better AI: We develop, validate, and deploy custom Machine Learning models unique to each brand’s high-value customers. A combination of past performance, psychographic profiles, and predicted future performance. Built by founders from Stanford, Wharton, Facebook, and Microsoft Research.
- Better Data: We leverage proprietary, future-proof database mapping behavior, personality traits, and attitudes of 260 Million Americans. We use telemetry and survey data from a smaller universe that has given explicit consent, but as opposed to working toward a world of questionable data on everybody, we use Machine Learning to extrapolate from the few to the many. We have built this database over the past 5 years and applied it to great success in the political arena as PredictWise (here for details).
- Stronger focus: We take our Big Data engine and augment CRMs with one metric: highly accurate Predicted Customer Value scores and data that is most actionable and causally related to value.
The outcome: Who, why, and how to engage customers based on their predicted value and dominant behavioral traits.
Ocurate: The Future
Ocurate’s software empowers organizations to operationalize a purposeful & sustainable growth strategy by attracting and retaining the best, most enduring customers for their business. Ocurate is committed to building meaningful, long-term relationships with customers, employees, partners, and investors aligned with this vision.
Care to join us on this journey?