For Private Equity
Value is realized through the efficiency with which a new customer develops a habit of repeat purchases and becomes a brand advocate, forming a lasting, bona fide relationship with the brand.
“Unfortunately, most companies don’t invest in relationships, at least not in a continuous, strategic way. It’s easy to understand why. Relationships are fuzzy, not easily measured. Marketers talk about them, but few businesses treat them as strategic assets.”
— Steve Diller, Author of Blind Spot
Steve Diller’s frustration now has a solution: CompassIQ.
Compass + Nail is the first to comprehensively measure the efforts that create Brand Advocates—true customer relationships—enabling strategic investment in a brand’s most valuable asset: its customers. Now, success can be quantified through brand affinity, customer connection, and the metrics of loyal buying behavior.
The New Standard Barometer of Health
Traditional financial metrics fail to directly correlate with customer behavior, leaving investors to rely on fragmented and often biased interpretations of retention, repeat purchase rates, and long-term buyer value. Due diligence has long been dependent on backward-looking financials and broad market assumptions rather than a definitive, predictive view of a company’s future performance.
CompassIQ changes that.
By measuring the efficiency with which a business generates high-LTV customers—its most valuable asset—CompassIQ provides a clear, quantifiable predictor of sustainable growth and profitability. Unlike conventional metrics, which are inconsistently estimated and platform-dependent, CompassIQ offers an objective, standardized benchmark for evaluating brand performance.
For investors seeking a more accurate and reliable metric to guide strategic decisions, CompassIQ represents a breakthrough: a data-driven approach to identifying businesses poised for long-term success.
Migration Rates provide a standardized, unbiased view of consumer buying behavior.
For example, Shopify reports repeat purchase rates as the percentage of customers who make a second purchase over their lifetime. This inflates retention metrics, creating a misleading narrative about actual value creation and profitability driven by high Migration Rates.
The example below illustrates this distortion—while Shopify reports a “20% repeat purchase rate,” the true measure of repeat buying behavior tells a very different story.
The Truth About Attrition
In One Year, 10k 1x Buyers True Attrition Nets Just 240 High LTV Customers
Knowing the truth regarding how efficient a brand is creating regular, repeat buying habits is why viewing efficiency via Migration is paramount in assessing the value of the brand in consideration. CompassIQ provides a proprietary diagnostic across the 14 Essential Biomarkers of consumer buying habit performance. These Biomarkers correlate directly with the financial performance of the brand.
Individual Cheerleaders’ Net Value 13x Casuals
Outcomes
CompassIQ provides visibility of how well new customers onboard and move to a state of sustained repeat purchase habits and advocacy in a deliberate way; therefore, it follows that improving on these proprietary metrics directly impacts the profitability and growth of the business.
What happens when a brand does improve its performance?
The following case study tracks performance over just 24 months. The brand studied here generated $16M revenue in eCom end of year 2021. The starting CompassIQ was 280. It improved 98 points to 378 during those 24 months. During that time the active customer buyer file grew 46% and revenue generated by the entire customer base grew 84%.
At the outset the profit contribution potential identified was $2.34M due to underperformance of Migration of Prospects to becoming regular, repeat buyers. The net result of this improvement was a capture of $1.6M of the original $2.34M of potential profit contribution.
Impact Summary
Capturing this profit just from the existing customer base creates an opportunity for additional profit to be realized by reducing the acquisition spend, which could result in adding another $500k to $1M+ in profit in this case.
With this intelligence, leadership now has the understanding to choose how to invest that savings, either directly back into acquisition to spur growth, or to go ahead and push that savings to the bottom line.
The application of CompassIQ provides business leaders with the visibility of profit potential and growth potential like never before (read The CEOs Dilemma).
For Investors
CompassIQ gives investors a consistent performance view and a reliable predictor of future growth and profitability—delivered through a fast, practical, and cost-effective evaluation tool.
The true power of CompassIQ lies in its agnostic, data-driven perspective.
We have quantified, benchmarked, and indexed the 14 Essential Biomarkers that drive business health, providing a standardized, objective measure of performance.
Value is created through the efficiency with which a business attracts Prospects, converts them into repeat buyers, and cultivates advocacy. CompassIQ helps brands optimize this process, turning customers into their most valuable asset—Brand Advocates.
By standardizing the measurement of value creation efficiency, CompassIQ enables investors and brands to compare businesses across sectors, price points, and customer demographics based on their ability to generate high-LTV customers.
For more on the subject read Your Data is Lying to You.