– “The most important thing in CRM is ‘data’”
– Simplify and automate complex CRM processes
– A solution that provides diagnosis and action… giving e-commerce businesses a competitive edge
– “Expanding from e-commerce to commerce…Goal of becoming No. 1 CRM solution by 2030”
The average percentage of online shopping visitors who make an actual purchase is only 2-3%. 97-98% of visitors either never visit the shopping mall again or remain as potential customers. One of the biggest challenges for e-commerce businesses is converting these visitors into actual buyers. Customers who have visited the shopping mall at least once have a much lower conversion cost than those who have not. That is why e-commerce companies focus on CRM (customer relationship management) marketing to capture potential customers. However, many companies are having difficulty implementing CRM.
In order to do CRM marketing, you need to select targets, objectives, campaign texts, channels, etc., but it is not easy to make decisions at each stage. When conducting a campaign, you also need the help of professional developers to plant tracking codes for each product and event. Even if you solve professional and technical problems, it is also a difficult task to integrate and analyze data from various sources such as shopping mall DB information and customer behavior information.
Datarise developed a data-based CRM solution to solve these problems. CEO Kim Seong-mu, whom we met at Datarise’s office in Gangnam, Seoul, introduced himself as a “data scientist” and said, “The most important thing in CRM is data. However, e-commerce businesses are having difficulties because they do not know much about data. I wanted to develop a data-based CRM solution to help e-commerce businesses grow.” He explained the background of Datarise’s founding.
CEO Kim Sung-moo worked on creating a user profiling engine (a technique that analyzes customer data and divides customers into groups with similar tendencies) at SKT Data Science TF/Center in 2012. He met Datarise co-founders Park Min-seong, CSO, and Lee Kyu-min, COO, here, and the three co-founders later founded Numberworks, a data-based marketing automation solution, in 2015. Numberworks was acquired by Kakao in 2016. They are data experts who co-founded Datarise in 2019 and have been with the company for 13 years to date.
Diagnosis and action in one go
“Unlike other solutions, Datarise provides diagnostics and actions in a single product. Everything from data collection to analysis and CRM campaign execution is connected.”
CRM is largely composed of two parts: diagnosis (analysis) and action (CRM). Global CRM companies also have specialized solutions for the diagnosis sector (such as Amplitude) and action sector (such as Braze). As a result, e-commerce businesses have been using separate solutions for diagnosis and action. CEO Kim pointed out that diagnosis and action should be performed organically, but because there are separate solutions, e-commerce is not utilizing them properly.
Processing data collection, analysis, and execution in a single solution ensures data consistency. It also prevents errors or losses that may occur during data movement. The most important thing is rapid response. By viewing data analysis results and taking marketing actions immediately, you can quickly respond to market changes or customer behavior. Another advantage is that by processing the complex tasks of collecting and processing massive amounts of data in a single system, you can reduce technical complexity and increase efficiency. Above all, when diagnosis and action are closely linked, campaign performance data is immediately fed back into the analysis system to optimize the next campaign more effectively. This provides a huge competitive advantage, especially for e-commerce companies that lack technical expertise or have limited resources.
From sophisticated data definition to processing
Diagnosis must be based on data, and data collection must be sophisticated in order to diagnose accurately. So what is 'sophisticated data'?
In order to collect 'sophisticated data', Datarise starts by redefining data. For example, if we collect data called 'first-time buyer', we define the term 'first-time buyer' accurately and collect data. Usually, in e-commerce, the first purchase is defined based on the past year or three months, but Datarise uses the time when the e-commerce company started business as the standard. If a customer called A made his first purchase from the e-commerce 5 years ago, A is literally the first buyer from the e-commerce. However, if it were a different CRM solution, A would likely be excluded from the first buyer.
The definition of a 'good product' is the same. Usually, when we think of a good product, we often think of it as a product that 'sells a lot'. However, in the end, the more it is exposed, the more it sells. That's why Datarise focuses on the ratio. A product that sells a hundred out of a thousand exposures can be defined as a better product than a product that sells a hundred out of a thousand exposures.
Kim said, “Usually, we only collect the number of purchases or exposure data for a product, but we need to collect sophisticated data to accurately diagnose and take action. Datarise collects very sophisticated data, such as how many times a product was exposed on the site and how many times it was exposed to which user.” In order to collect sophisticated data, we need to collect a large amount of data related to products and users. Datarise has collected over 200 billion data points so far.
So how do we collect this data? Datarise has developed a comprehensive script that automatically captures user behavior across the entire page to collect data. In order to efficiently process the massive amount of data collected, the data is compressed and stored on the server. The collected raw data goes through a complex post-processing process to analyze each piece of data, such as which product was exposed to which user, in order to convert it into meaningful information. The data collected in this way is currently close to 100 terabytes.
The data collected in this way is used to find insights, compare key indicators with the market to quickly identify good and bad and connect them to campaigns, analyze customer behavior patterns, and predict purchase possibilities. “Datarise models what products a specific user is interested in, how likely they are to purchase, and how likely they are to churn. We create a profile for each user,” explained CEO Kim.
CRM Marketing Made Easy
“E-commerce companies have nothing to do.”
Another strength of Datarise is its ease of use. Since Datarise collects all data and post-processes it on the server, there is no need to embed tracking codes for each product. Above all, you can start a personalized CRM campaign right away with just a few clicks.
Datarise offers over 100 presets useful for e-commerce. You can take action right away with one click. For example, you can easily induce customer visits with presets such as ‘Notify about coupons expiring soon,’ ‘Recommend products related to the product you are currently viewing,’ and ‘Recommend new products to customers whose last visit was 7 days ago.’ CEO Kim explained that this method “will allow you to use more diverse functions as your understanding of CRM marketing increases.”
Kim Sung-moo, CEO, explained the automation level of Datarise’s CRM solution, saying, “If we compare it to the autonomous driving stages of automobiles, while existing solutions provide basic driving assistance functions at levels 0-2, Datarise is achieving high automation at levels 3-5. Just like Tesla.”
Datarise’s differentiated approach is delivering real results. Onsite campaigns alone have resulted in an average 8% increase in sales, while offsite message campaigns are showing even more impressive results. The average return on ad spend (ROAS) for NotificationTalk is 7,639%, FriendTalk is 3,835%, Text is 2,151%, and Email is a whopping 27,640%.
Pay only for what you use
Datarise is usage-based. You pay per message, and the monthly subscription fee is also set in proportion to the number of visitors. “I think usage-based is reasonable. Many existing CRM solutions incur costs based on the number of customers or events. Datarise thought it was right to charge in proportion to how much CRM the customer uses,” explained CEO Kim.
Datarise currently has over 500 paying customers, and according to a recent NH Investment & Securities report, Datarise is recording a high paid conversion rate of 66.6% and a subscriber retention rate of around 95%.
“The CRM market is just beginning”
“The core of commerce is the product, but that alone is not enough. People’s memories are short and they don’t remember for long. So, just giving customers a light notification can have a brand recognition effect and induce them to visit. These relationships build up and build up, and the site grows.”
CEO Kim has a bright outlook for the e-commerce CRM market. CEO Kim said, “Ultimately, they start with Coupang or Naver, but after they grow to a certain extent, they end up creating their own mall. Global is similar. I think the CRM marketing market is just beginning. Just like the performance market, a leader in the CRM market will emerge in the future, and I think Datarise can be that place.”
Stepping into the global stage, for the world's No. 1 commerce CRM solution
Currently, Datarise is expanding beyond the domestic market and into the global market. It has already started its service in Japan. It is currently establishing a corporation in the US and is planning to start its official service in July, and is planning to expand into English-speaking markets such as Australia and Singapore. Datarise plans to attract a bridge investment round in the second half of this year for global expansion.
CEO Kim expressed his ambition, saying, “Datarise’s goal is to grow beyond e-commerce to become a commerce CRM and become the global No. 1 by 2030.”
Datarise is creating a new paradigm by simplifying and automating the complex processes of e-commerce CRM. Datarise’s growth based on technological differentiation, ease of use, and deep understanding of data is proving that data can be the core fuel for business growth.
The data-based CRM innovation that Datarise is creating is only just beginning. We look forward to seeing what kind of results they will achieve in the global market in the future.
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