Founded in 2011 and based on the concept of one-on-one marketing as portrayed in the 2002 hit movie Minority Report, SimpleRelevance, a Chicago startup, has created a new technology that allows businesses to laser-target customers with personalized digital marketing. Their proprietary technology integrates internal and external data to build a complete profile of every customer, predicts what customers are likely to buy, and creates “the perfect e-mail” which enhances customer engagement and revenue.
PRODUCT/SERVICE: Their proprietary technology collects data from numerous sources (prior transactions, demographics, psychographics, social media, app stores, etc.) and automatically writes and sends customized e-mails at the optimal time of the day, with a catchy subject line, and other content, including appropriate product recommendations, that is unique to each customer. It typically takes about 15 minutes to set up the platform which easily syncs with a client’s e-mail service provider and e-commerce site. At a minimum, customers need an e-mail service provider. You sign up once with SimpleRelevance and that’s it.
VALUE PROPOSITION: SimpleRelevance offers the following value propositions: 1. Transforms e-mail into a powerful sales and marketing tool. Currently, 84% of companies don’t send e-mails to customers and 89% of those who do send non-targeted e-mails with little relevance or effectiveness. A study by Columbia Business School revealed that 49% of CMO’s say that their biggest challenge is the inability to use data and personalize communications. 2. Automates the e-mail marketing process saving time and money. The technology, not a paid employee, automatically writes the narrative and targets the customer to receive the e-mail. 3. Studies show that an effective use of e-mail can increase revenue by 50% or more. 4. The technology integrates seamlessly with popular e-mail services such as Constant Contact, ExactTarget, iContact, MailChimp, VerticalResponse, etc.
MARKET SIZE: According to International Data Corporation (IDC), the premier global provider of market intelligence, e-mail marketing is a $5 billion global market and e-commerce is estimated at $1.3 trillion. Simple Relevance plans to leverage other communication tools and channels (personalized text messages, social media, YouTube, etc.) to further drive revenue. They are targeting the B2C market.
REVENUE MODEL: SimpleRelevance charges a monthly retainer based on the size of the e-mail list. They offer a 30-day free trial and guarantee an increase in monthly revenue or don’t charge the customer. They generate ‘free money’ without clients working for it.
MANAGEMENT TEAM: Erik Severinghaus, founder/CEO, co-founded iContact, a major e-mail service provider, in 2002 and generated over $250MM in sales during 6 years at IBM. Prior to joining SimpleRelevance, Eli Albert, CTO, developed brain-imaging software for the University of Chicago’s neuroscience lab. He is an expert in signal analysis, collaborative filtering, and other web development technologies. Joe Peck, VP of Sales & Business Development, led sales teams at both Groupon and Careerbuilder. SimpleRelevance has 10 full-time employees and, in addition, uses an army of interns to grow their business.
COMPETITIVE ADVANTAGE: SimpleRelevance has the following competitive advantages: 1. A patent-pending recommendation algorithm built by machine learning and signal analysis experts from the University of Chicago’s computer science department. 2. The technology is constantly learning and collecting data to automatically write customized e-mails and effectively engage with customers. The majority of companies do not practice targeted marketing. Their tactics have not changed over the last 10 years. They continue to “batch & blast” unpersonalized e-mails. For example, J. Crew, a billion-dollar clothing retailer, sends women’s clothing ads to men. 3. Their technology profiles customers and automatically creates discounts to maximize profits. Loyal customers receive a free shipping offer and prospective customers are incentivized with the offer of a 30% discount. 4. SimpleRelevance is the only platform that integrates into existing tools and work processes to optimize marketing communications with customers.
PROOF OF CONCEPT: SimpleRelevance has already generated significant revenue from a rapidly growing client base and retained 100% of its clients. Marketo and Eloqua solved a similar problem in the B2B space. Currently, Marketo has a market cap close to $700MM and Oracle acquired Eloqua for $871MM. Each company is valued at more than 9 X revenue.
CUSTOMERS/USERS: SimpleRelevance has acquired and retained more than 30 customers in a variety of industries and is growing revenue by more than 20% per month. Their customers have experienced conversion rates ranging between 30% and 300% and, on average, received $19.17 in incremental revenue for every $1 paid to Simple Relevance. SimpleRelevance helped Nissan generate over $1MM in incremental revenue within 90 days and increased by 49% the e-mail revenue of Li-Ning, a billion-dollar sportswear brand company in China.
STRATEGIC PARTNERS: SimpleRelevance is backed by Chicago Techstars. They were one of 10 startups selected from over 900 applicants to participate in their accelerator program during the summer of 2013.
FUNDING: SimpleRelevance has raised $1.1MM to date from New World Ventures, Hyde Park Venture Partners, Hyde Park Angels, and Chicago Ventures. In addition, the General Manager of Li-Ning in North America invested after witnessing the effectiveness of Simple Relevance. They seek an additional $5MM to scale both the technology and customer acquisition.
SUMMARY: SimpleRelevance has gained significant traction and is building momentum. They are in position to raise a second round of capital and explode the company to the next level. The company must move quickly as targeted marketing is a very hot topic and the competition will be breathing down their neck. ❒
[Photo of Laura Boring, Head of Marketing and Program Managament; Erik Sevringhaus, Founder/ CEO; Maggie Engh, Marketing Assistant, by David Carman. © Blackline Review]