Nasty Gal + Custora: 11% revenue lift with a tailored approach to lifecycle marketing

“The marketing team was hungry for analytics and customer insight metrics. It was crucial to get insight into our performance, identify opportunities, test them, and eventually roll out successful initiatives at a greater scale.”

- Michael Fellner, Director of Retention Marketing, Nasty Gal

Nasty Gal is a global online destination for fashion-forward, free-thinking girls. Founded in 2006 by Sophia Amoruso as an eBay store selling vintage pieces, the business grew quickly to become an international style source offering both new and vintage clothing, shoes, and accessories. The brand's marketing campaigns are as bold and fresh as the clothes they sell: Leveraging CEO Sophia Amoruso's new book, #GIRLBOSS, and collaborating with Girls' Lena Dunham to promote her new book, Not That Kind of Girl.

The challenge: “One size fits all” approach to winning back lapsing customers

Nasty Gal has always been a data-driven, customer-focused retailer. As such, it recognized the value of customer lifecycle marketing in targeting their customers with the right marketing communication at the right time, according to their lifecycle stage. Many retailers nowadays recognize the importance of customer retention, and invest in retention marketing across channels. Specifically, one element of a successful customer retention strategy is churn detection and prevention: Trying to detect when a customer is at risk of lapsing, or churning, and then sending the customer a message trying to re-engage them and prevent the loss from occurring (typically with a discount or a promotional offer).

A standard win-back approach would be to send that out to customers that hadn't purchased for six months. But for a monthly shopper, six months might be waiting too long -- the retailer might have missed the opportunity to re-activate them. Conversely, for a customer that typically buys only once a year around holiday time, the retailer might be throwing away discount margin unnecessarily.

The solution: Winback campaigns using Custora’s individual churn detection algorithms

Nasty Gal turned to Custora’s predictive algorithms to target customers who were identified to be at risk of churning. Custora's churn detection models use predictive analytics to map the purchase pattern of each individual customer, and to identify customers at risk of churning.

Custora’s platform also enabled Nasty Gal to layer on different promotional offerings as part of the win-back campaign, based on different customer lifetime value (CLV) segments: For example, churning customers with a high CLV would receive an email with a discount offer, while those with a low CLV would receive a “we miss you” email with no promotional offers.

The results: 10.7% lift in revenue, 17% lift in activation rate, 8x ROI

Reaching the right customer at the right time can lead to breakthrough gains: Nasty Gal has driven a 10.7% lift in overall revenue (compared to the control group) by personalizing the timing of activation messages to members and winback messages to lapsing customers.

“Custora enabled us to test campaigns to customers at risk of churning, and email these customers with different value propositions, in order to identify the most impactful combination of message and offer, which we are now automating.”

- Michael Fellner, Director of Retention Marketing, Nasty Gal

Download the full case study here.

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