The client: Renowned retail company
Area of engagement: Customer lifetime value
Over a decade, the specialty retail industry is witnessing considerable growth owing to the rapidly growing middle class, sturdy economy, and the availability of trained manpower. The specialty retail industry is highly fragmented and comprises stores that focus on catering merchandise including grocery stores, pharmacies, and boot stores. With the customers craving for authenticity, innovations, and convenience in their products offered, prominent organizations are focusing on innovative ways to delight their customers and strengthen loyalty. Also, the radical shift toward a customer-centric environment is compelling businesses to look for transformative possibilities to change their retail outlook and offer personalization through their extensive product knowledge. Although the specialty retail market will witness exponential growth due to macroeconomic factors such as GDP, rising disposable income, and consumer spending, several factors may influence the growth of the market.
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Growing E-commerce: Also called the Amazon effect, the recent years have witnessed the entry of leading-edge e-commerce giants into the retail space. The present consumers are more demanding and are looking for convenient ways in their shopping activities. With the gradual growth in the e-commerce platforms, it becomes essential for brick-and-mortar space to stay relevant with these technologies.
Rising consumer demands: Lately, the busy lifestyles are forcing customers to look for more convenient options in their shopping activity. The shopping preferences of the customers are changing, and they are looking for authenticity and innovations in their product offerings. To efficiently cater to the growing demands of the customers, organizations are spending highly on their R&D activities.
To ascertain the changing demands and retain the brand value for the customers, leading organizations are utilizing the need for a reliable customer lifetime value solution. The customer lifetime value is a prediction of all the value a business will derive from the relationship with a customer. The principle of customer value believes that 80% of the effects come from 20% of the causes.
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The Business Challenge
According to the latest research, specialty retail constitutes 50 percent of the organized retail market in India alone.
The client, a renowned specialty retailer, wanted to optimize their acquisition spending to maximize the customer value through minimum cost. The client wanted to seek ways to understand the value that the customer will bring to the business. With the help of a customer lifetime value solution, the client wanted to determine how much the company wants to spend on acquiring new customers and the number of times the company can expect the business. Moreover, the primary objective for the client was to measure the customer’s worth over a specific period of time.
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The Solution and the Business Impact
The customer lifetime value solution offered by Quantzig helped the specialty retailer maintain the account statistics in terms of the customers’ expenditures per visit and the total number of visits gained from the customer. The solution also gained an accurate understanding of the total number of visits by the customers by week and year. The engagement also helped the specialty retail client determine the average revenue per customer and the projected revenue that customers will generate during their lifetime.
Customer Lifetime Value Predictive Insights
The engagement offered by Quantzig helped the specialty retail client define their customer relationships and make informed business decisions on sales, marketing, product, and development. The engagement focused on tailoring the products and services to the customers, and design their financial investments to acquire the most profitable customers.