e-mail and other channels (sort of like what Netflix does with DVDs); “customer segmentation” stratifies your consumers and separates what they’re buying into distinctly targetable groups; “customer behavior” identifies customers that could become key advocates for brands, as well as those that are likely to purchase products from a competitor; “product profitability” predicts product revenue and profitability based on sales predictions; and “product relationships” analyzes which items tend to be bought together (at once or over time) by a given customer.
“We believe there’s a whole group of companies less than $1 billion [in revenue] that are Netflix and Zynga wannabes, Google and Amazon wannabes,” says Levin, Quant5’s CEO. “These are end-user companies interested in catapulting themselves into advanced analytics. That’s where Quant5 comes in.”
The startup’s software accesses companies’ sales and marketing data, but it also incorporates public information from social networks and broader sources like weather and economic data. Using what Levin describes as proprietary agents and crawlers, algorithms, and machine learning—all built on top of an open-source infrastructure—the software outputs recommendations of which products to market to whom. A key part of Quant5’s offering is visualization of the data analysis (see image, below, of product relationships for a home-goods retailer).
Of course, any software like this will have tons of competition, and the proof is in the pudding. Levin says a ballpark metric is that companies using Quant5 could potentially see their direct marketing campaign hit rates go from 1-3 percent to 20-30 percent. “We can show them [return on investment] on the first sales call,” he says. “We show them where they can generate new revenue, and also where to reduce churn.”
Quant5 has about 11 full-time employees and has been testing its software with 14 beta customers. The company was founded last year by Levin and Marcelo Ballestiero (they met at MIT) and has been mostly self-funded, with some help from outside investors. It sounds like Quant5 is in the midst of raising a financing round, and will go for a bigger venture round in the future.
As for the bigger picture, Levin sees Quant5 as the “great grandson of SAS,” the business analytics giant, and part of a trend of
