How Does Your Retail Marketing Really Measure Up?
As a customer intelligence platform, Custora provides solutions to help retailers take control of challenges like acquiring higher-value customers, converting one-time buyers, and slowing down customer attrition.
The platform stitches together disparate customer data, uses AI to surface insights on each shopper, then provides an interface for marketing leaders to activate a cross-functional, cross-channel strategy to move the needle on key customer KPIs. Over 100 leading retail brands use Custora to be more customer-centric and grow customer lifetime value.
Through our extensive work with retailers, we’ve gotten privileged access to some of the retail world’s top brands, and with this access, we’ve been able to develop a holistic view of how retailers in various industries are performing across key metrics. Which is why we have created our latest product: Customer-Centric Benchmark Reporting.
Why Should You Benchmark?
Benchmarks are a critical input for forecasting and goal-setting. It’s important to have not only a strong internal-facing perspective in terms of historical performance but also an outward-looking perspective to understand how all your internal data points look within the context of broader market trends.
In other words, you use internal performance metrics to see where your growth opportunities and leaky buckets are, and you use external benchmarks so you can better estimate what’s feasible, and to put your performance in perspective — maybe your YoY acquisition rate grew by 2%, but the industry average is 4%?
Taking a look at the illustration below, you’ll see the Custora Customer Data Cloud. For any customer we work with, in order to deliver the insights we surface, we pull in data from all of their disparate systems and centralize their customer data.
We have that for all of our different customers, 100 U.S. retailers and counting, so we have separate pictures of customer metrics for lots of different brands in the retail space. We're able to anonymize that data, make it non-identifiable, and then look at the trends and averages across different industry sub-segments.
Your Competitive Set
Custora works with a ton of different brands in the industry. When we're benchmarking, we're actually looking at upward of 200 million different customer records. But not every competitor in that sample is going to be relevant for every brand, so we break down that larger sample size into smaller subsets that are more relevant on a few different vectors — everything from your target demographic to your merchandise, how expensive are you as a brand to how large and how mature your company is.
Given how much data we have, there are many different directions we could have gone. We didn't want to barrage retailers with dozens of metrics to sift through and make sense of.
So we narrowed it down to three key areas where we hear brands looking for guidance on how to grow their business. From there we zeroed in on the different underlying drivers.
The three key areas that our Benchmarks focus on are:
- Buyer Lifecycle
- Mobile & Omnichannel Engagement
- Customer Economics
Underneath each of those categories are the key drivers of the health of your business for each of those categories. For the vast majority of these sub-metrics, we focus on growth rates. Each business is very different and growth rates are a way to make sure that we're not comparing apples to oranges.
- Acquisition — year-over-year (YoY) growth in the number of new customers
- Retention —YoY growth in the number of retained customers
- Reactivation — YoY growth in the number of reactivated customers
- Cross-Sell — YoY growth in the average number of items per order
- Upsell — YoY growth in the average unit revenue
- Frequency — YoY growth in the average number of orders per customer
Mobile & Omnichannel Engagement:
- Mobile Growth — YoY growth in the number of customers who have purchased via mobile
- Mobile Penetration — The share of active customers who have purchased via mobile
- Omnichannel Growth — YoY growth in the number of customers who have purchased both online and in store
- Omnichannel Penetration — The share of active customers who have purchased both online and in store
To present all of this data to our customers, we start at a high level and drill down.
At the very highest level, we create a scorecard that answers, very generally, the question of, “Am I a leader or a laggard in all of these different metrics?”
If this radar chart is your scorecard, you might surmise that your business is a leader when it comes to new customer acquisition and mobile engagement, but you have a lot of growth potential in areas like reactivation, and that might be a place to focus your efforts in the coming year.
Drilling down deeper from the high-level scorecard, we show each brand what their specific ranking is relative to their competitors.
On your scorecard, you see more directionally if you’re a leader or a laggard. With the aggregate rankings, you can see specifically how much of a leader or laggard you are among your competitive set.
What you see here are specifically the rankings for lifecycle metrics. Customers who opt into Benchmarking with us receive detailed rankings on Buyer Lifecycle, Customer Economics, and Mobile & Omnichannel Engagement.
These rankings really answer the question of which specific metrics and categories you should be targeting when setting KPIs.
Detailed Metric-by-Metric Results
“Okay,” you say, “I might be #6 in Acquisition, but how far am I from being #5 or #1?” That’s when you see this chart:
What you see here is an example of anonymized, non-identifiable data on the actual growth rates for each of the brands in your competitive set and each of the rankings.
This tells you not only what areas you should focus on, but it also begins to give you an idea of the KPIs you’ll want to target.
Circling back around to that fourth step in the customer-centric cycle above, you want to measure often enough to know if you’re moving in the right direction so you can track and optimize over time. That’s why our benchmarking reporting includes monthly trends so you can see how your ranking changes month to month and how you stack up against the median and the average for your industry sub-segment over time.
So that’s our Customer-Centric Benchmark Reporting in a nutshell. Below is a short FAQ. If you have any additional questions on this new offering from Custora, please contact us here.
Customer-Centric Benchmarking FAQ
Is Custora sharing my customer data with my competitors?
No. Custora scrubs and anonymizes all benchmarking data so that it cannot be identified with a given brand.
Are benchmarks currently available in the Custora app?
Benchmarks are in Custora’s product roadmap. Until benchmarks go live in the app, they will be provided as a regular report.
Is benchmarking included or is it an add-on?
Benchmarking is an add-on that is available to customers who opt in.
If you’re interested in learning more about Customer-Centric Benchmark Reporting, feel free to reach out here.