Punchh, a software startup that creates digital marketing tools for physical retailers like restaurants, announced the release of its new machine learning-based “Predictive Customer Lifetime Value” (PCLV) application this week. But will this new technology just be another avenue for data darwinism?
CLV is a metric companies use to predict how much money they will reasonably get from any one customer. The concept certainly makes you wonder whether restaurants are feeding you meat, or if you’re the meat feeding the restaurant. Regardless, it’s something restaurants are using more. Fellow restaurant app-maker, Toast, did an explainer post on CLV awhile back.
From the Punchh press release:
From the moment a customer makes their first purchase, Punchh instantly predicts their CLV, then constantly refines that prediction as the relationship between the brand and customer deepens. Based on that PCLV, retail marketers can create target segments with this data to, for example, encourage high CLV segments to enroll in rewards programs while offering low CLV segments incentives through coupons.
While this PCLV may be useful to a restaurant for marketing purposes, it also feels like more data darwinism, like my purchases will determine a company’s level of interest in me. If a restaurant predicts that I’m a low-ticket customer for them from my very first purchase, will they just ignore me? Or will I get worse service? I asked Punchh about this and Xin Heng, Punchh’s Senior Director of Data sent me the following response:
Xin: They won’t be ignored, they will just be put in a different bucket (or segmentation). In other words, low CLV customers will be continuously monitored and treated with winback campaigns. But those who are outside this segment can be subject to games, compression campaigns, a referral callout and more. It’s just about segmentation, but every customer is consistently monitored regardless of what segment they fall into.
Great(?), a restaurant will still be sending me emails no matter how much–or little–I spend! The company is billing the PCLV tool as a restaurant’s virtual data scientist, but it seems like moneyballing me could be just another way that data ruins dining out with too many predictions about my behavior.
We’ll soon see, as Punchh works with more than 160 brands including Pizza Hut, Del Taco, Denny’s and TGI Friday’s. The company has raised $31 million in funding and earlier this month opened up an engineering hub in Toronto.