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The customer retention platform adds Forerunner Ventures' Kirsten Green to its board
In the world of commerce, customer retention is critical to success. Some 80% of future profits will come from just 20% of existing users. It’s the reason why subscription commerce has taken off the way it has. There have been a few services over the years that have targeted customer loyalty. Customer loyalty/rewards platform Belly just raised $12.1 million on Wednesday. One platform in particular—Retention Science—has gotten a big vote of confidence from investors. The Santa Monica-based company announced Thursday that it has raised $750,000 from Forerunner Ventures in addition to the $1.3 million seed round the startup raised in July 2012, led by Baroda Ventures.
With big name customers like CafePress, The Honest Company, and Chrome Industries, Retention Science has amassed a growing list of clients for whom the platform is driving up to 133% increases in customer spending and 15% increases in business margin improvements (a big deal when you consider the fact that even Amazon has managed to build a multi-billion dollar empire on razor thin margins).
Using its Customer Profiling Engine, Retention Science aggregates customer demographic data, on-site behavioral data, historical/sales data, and social data to predict the best course of action to take in order to re-engage a customer. Some of the customer behaviors it monitors include time spent on the site, browsing pattern, abandoned cart items, and more.
“We are a campaign optimization platform that harnesses the power of big data and predictive algorithms to tell online businesses not just information about their customers, but what to do with their customers to increase retention and repeat sales,” said CEO Jerry Jao.
Retention Science says it received over 20 inbound requests from potential investors but went with Forerunner Ventures based on its history of success with companies like Birchbox, Warby Parker, and Bonobos.
"The healthiest retail businesses excel at deepening relations with existing customers,” said Forerunner Ventures founding partner Kirsten Green in an email. “Amidst the many companies offering customer acquisition, management and even personalization solutions for retail, Retention Science stands out with an explicit commitment, and demonstrated early results, helping retailers grow sustainably through empowering lasting, productive relationships with existing customers."
Green is joining Retention Science's board of directors.
Retention Science currently has some two dozen active clients, though more than 70 companies have downloaded the software. The platform has analyzed some 500 million consumers across all of its sites and clients, totaling up to $1 billion in sales and more than one billion actions profiled.
The company plans to use the new capital to ramp up hiring.
“We've been running a very lean team and actually have several back-logged customers that we cannot onboard at the moment due to resource constraints, the additional capital certainly enables us to increase headcount sooner,” said Jao.
Image source: messynessychic.com
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