1. Using customer data to
increase profits and
keep customers for life
Stéphane Maquaire, Monoprix CEO
Emmanuel Déchelette, dunnhumby France COO
#monoprix
#edechelette
2. The story we want to tell you
?
Who we are
Our journey together so far
What we want to achieve together now
Examples of customer insight based decisions
19. Our journey together so far
Empower staff to serve customers
Collaborative category reviews
2013
Promotional healthcheck
Personalized contact plan
2012
Store customer reports
Customer pricing
2011
Customer category reviews
Customer strategy / engagement
2010
Customer contact plan
Customer knowledge
2009
Customer healthcheck
20. Understand better our customers
1 Loyal worth 5 Opportunity customers
Only 1 out of 10 Opportunity cust. becomes Loyal
43% of Loyal customers are not loyal one year later
Multichannel Loyal customers spend 30% more
Only 3% of Loyal customers are multichannel
21. Our journey together so far
Empower staff to serve customers
Collaborative category reviews
2013
Promotional healthcheck
Personalized contact plan
2012
Store customer reports
Customer pricing
2011
Customer category reviews
Customer strategy/engagement 2010
Customer contact plan
2009
Customer healthcheck
Customer knowledge
22. Customers at the heart
of our corporate strategy
Customer
Promises
Vivement
aujourd’hui !
Company
commitments
Staff
requirements
23. Our journey together so far
Empower staff to serve customers
Collaborative category reviews
2013
Promotional healthcheck
Personalized contact plan
2012
Store customer reports
Customer pricing
2011
Customer category reviews
Customer strategy / engagement
2010
Customer contact plan
Customer knowledge
2009
Customer healthcheck
24. Price Sensitive Customers are
more elastic to price
Additional sales
100%
3x
Price sensitive customers
Mainstream customers
<=5%
Upmarket customers
50%
0%
-5 - -2%
+2 – 5%
40%
>=5%
-2 - +2%
When you lower
price by
>5%, you have
3x more elasticity
on price sensitive
customers
26. Our journey together so far
Empower staff to serve customers
Collaborative category reviews
2013
Promotional healthcheck
Personalized contact plan
2012
Store customer reports
Customer pricing
2011
Customer category reviews
Customer strategy / engagement
2010
Customer contact plan
Customer knowledge
2009
Customer healthcheck
27. A personalized contact plan
Monthly spend:
Uncommitted (Opp.)
Potential (Opp.)
30€
90€
Good (Loyal)
200€
Best (Loyal)
400€
600,000 customers contacted every month
Each customer receives a unique version
Launch of targeted mailings in 2010
10 personalized mailings per year
28. A personalized contact plan
Personalized mailing participation rates
2013
2011
70%
Personalization
increases customer
participation over time
58%
60%
2010
2009
50%
43%
40%
28%
30%
20%
10%
5%
3%
1%
0%
Best
Good
Potential
29. Our journey together so far
Empower staff to serve customers
Collaborative category reviews
2013
Promotional healthcheck
Personalized contact plan
2012
Store customer reports
Customer pricing
2011
Customer category reviews
Customer strategy / engagement
2010
Customer contact plan
Customer knowledge
2009
Customer healthcheck
30. A customer report for each store
•
Key customer profiles
& indicators
•
Benchmark vs. region
and comparable stores
OBJECTIVE
Prioritize actions at store level
based on this customer knowledge
31. Our journey together so far
Empower staff to serve customers
Collaborative category reviews 2013
Promotional healthcheck
Personalized contact plan
2012
Store customer reports
Customer pricing
2011
Customer category reviews
Customer strategy / engagement
2010
Customer contact plan
Customer knowledge
2009
Customer healthcheck
32. Category Reviews are Collaborative
% manufacturers’
teams agree :
% of Monoprix’s
teams agree:
Did CCR meet your
expectations?
CCR improve quality
of the collaboration?
73%
Are CCR adding value
to my business?
80%
Did CCR improve your
relationship with Monoprix?
80%
77%
33. What we want to achieve together now
PROFIT
Ebit
Short term
LOYALTY
Loyals
Retention
Long term
34. What we want to achieve together now
Respond to what’s most
important to our Loyal
customers
Monoprix and Brands
make better decisions
based on our customers
Improve our price perception by smarter investment
for our customers
Provide a seamless
shopping experience to
each customer
35. Kill average!
• 1.5l Coca-Cola Reg
• 1.5L spring water Monoprix
67% of
• Milk 1L ½ skimmed value
• 6 fresh eggs Monoprix
cardholders
didn’t buy any of
these products!
• Emmental cheese Monoprix 100g • Activia nature 4 x 125 gr
• Tissues box Monoprix
• Beer Bavaria 50 cl 8,6
• Butter 250 gr Monoprix
• 1L orange juice brik Monoprix
What is the proportion of customers who didn’t buy
any of the Top 10 Food products over 6 months?
A.
10%
C.
25%
B.
33%
D.
67%
36. Kill average!
Price Sensitive customers
Upmarket customers
0!
What is the number of products in common between
Top 10 Food products for Price Sensitive and
Upmarket customers?
A.
0
C.
4
B.
2
D.
6
37. Silos vs halo effect
Price Sensitive
stores
Upmarket
stores
-5.3
+1.4
% Total Grocery additional units
+4.9%
-1.2%
% Total Grocery additional sales
+2.5%
-0.5%
% Total Grocery additional profit
+0.1%
+0.5%
% Total store additional visits
+3.5%
-2.0%
% Total store additional profit
+1.7%
-1.5%
Total Grocery price
decrease / increase (in % pts)
38. Short term vs long term
Net profit by euro invested
1.7
Opportunity customers
Loyal customers
0.6
0.5
0.2
Short term
Long term
Basing decisions on
customers means
making better long
term decisions
39. Rewarding loyals is profitable
Additional sales by euro invested
4.00 €
3.78 €
You can stretch
your best
customers when it
is relevant to them
2.93 €
2.00 €
.76 €
0.00 €
Loyals to
the brand
Switchers
to the brand
Category buyers but
not to the brand
40. Free home delivery is profitable
Same Customers
Last Year
This Year
Uplift in Sales
Additional Costs
Additional Margin
€+32m
€+3m
€+6m
Uplift in Sales
Additional Costs
Additional Margin
€-34m
€-3.5m
€-6m
Same Customers
Last Year
This Year
42. In conclusion, to make better decisions
Kill average
Use long term customer KPIs
Capture the halo effect
Test & learn
Thank
You!
Editor's Notes
Emmanuel : We work with some of the biggest brands in retail, our insight is valued and many brands actively want to work with us. Many relationships between brands and retailers are purely financial – e.g. Manufacturer: “This is the value of my product”, Retailer: “This is what I want to pay for it”. We help build a relationship between retailer and brand that focusses on the customer.
Emmanuel:A month ago Stéphane asked us to help them invest in a smart wayThis is a great example:If you have to invest $1m, customer science will help you to maximise your ROI.As says Simon Hay, dunnhumby CEO: ‘it is tautologic’ price sensitive customers react more to price!!!When you lower price by more than 5%, you have 3 times more elasticity on price sensitive customers than on UM customersThen, the money you save then can be invested on what matters most to your upmarket customers: services & qualityIt is not products that are elastic to price, it is customers!
Stéphane:Pricing adjusted to lifestyle and income.It lead to totally reshuffle our pricingapproach vs what we did before 2010Before we have merely the same price index for all products and all stores.Now we are stretching price indexes taking into account importance of each products to PS customers and PS profile of each store.Emmanuel : explanation of the gridStéphane : conclusion on the stretch
Emmanuel:This a powerful quiz we use to run with buying teams when we start a partnership to make them understand from their own data how much they need to kill average sales if they want to respond better to their customers’ needs.
Emmanuel:This a powerful quizz we use to ask to buying teams when we start a partnership.
Emmanuel:We ran a test for 24 weeks. We lowered Grocery prices in the most PS stores and increased them in the most UM stores.What we learnt together is a smart price investment can be profitable because as it increases visits total stores it enabled PS stores to sell more Fresh and non food products and then to increase profit total store.From Monoprix data, we also know that visit is driving much more loyalty than average basket.So when you are increasing prices you decrease long term loyalty.Stéphane:We learnt that price investment or price increase should be owned by the exec as part of the halo effect.You can’t ask categories & stores to bear it.So it means we need to be more accurate in piloting our budgetary process.
Emmanuel:At dunnhumby, to measure the impact of our media plan, we run control sample of customers.We run 2 types, one control for each campaign or monthly mailing and we also run a permanent control sample of customers who don’t receive any mailings over the year.It enables us to measure the short term & the long term impact of our media plan.Short term, you can see that Opp. customers are more reactive to our mailings than Loyal customers.But long term, it is the opposite.How many organizations measure the long term impact of their comms?By focusing on short term results, you are not leveraging value.Finally, it is very profitable to reward regularly your best customers.When tracking customer over time, and basing decisions on customers, you’re making better long term decisions.
Emmanuel:Very often the DNA of Brands/Marketing teams is all about acquisition.Atdunnhumby, we believe rewarding your best customers can provide the best ROI.This example demonstrates it.We used to target various sets of customers with our product coupons.We discovered the best stretch in terms of additional sales was already on your best customers vsbrandswitchers or not brand buyers at all.We think brands & retailers should balance their customer contact plan.By the way, we can help also on acquisition with our ability to embed our algorithm ‘shoppers like you’.
Stephane:For short term profit consideration we have been asking ourselves recently if we should stop free home delivery from stores for our loyalty cardholders.From a short term cost point of view it is a no brainer but we asked dunnhumby to look at the impact on our customers before making this decision.Emmanuel:So we looked at 2 sets of customers with the same behaviour a year before.We identified that for customers who were not using free HD and who are now, they are spending an incremental 32m in sales compared to customers who remained not using FHD. Reversely customers who stopped using FHD spent 34m less than customers still using FHD. Given the additional costs of delivery c.3m, it leads to a +6m in additional margin.Stéphane:So we decided not to stop FHD for Loyalty cardholdersEmmanuel:For me it is another great example of FHD for a multichannel retailer. As a multichannel customer spend much more than single channel ones, if you look at the overall profitability of your customers you don’t need to charge the HD for your best multichannel customers. They will spend even more, in a profitable way for you and you will lock them against competitors such as Amazon.
