CRM Analytics and Segmentation

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A leading retailer benchmarked their customer behaviour metrics against that of their competitors and noticed that their customers were coming to the stores far less frequently and that the average number of items in their basket was lower. Moreover, the customers often chose only 1 product with almost laser like focus without considering any of the numerous other product categories the retailer has to offer. They clearly needed to change this behaviour and increase visit frequency as well as basket size through relationship marketing.

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CRM Analytics and Segmentation

  1. 1. Global Data & Analytics CRM Analytics and Segmentation - Leading Multi-Channel Retailer Ogilvy & Mather
  2. 2. CRM Analytics and Segmentation Leading multi-channel Retailer Business Challenge A leading retailer benchmarked their customer behaviour metrics against that of their competitors and noticed that their customers were coming to the stores far less frequently and that the average number of items in their basket was lower. Moreover, the customers often chose only 1 product with almost laser like focus without considering any of the numerous other product categories the retailer has to offer. They clearly needed to change this behaviour and increase visit frequency as well as basket size through relationship marketing. Solution Ogilvy created a Relationship Marketing framework that was built on 3 primary assets: • A micro segmentation schema that allowed the retailer to target its customers with relevant communications based on their predicted behaviour. - Life Time Value: we built statistical models that predict every individual household’s spend over the next 3 years. This allows us to take into account long term value expectations in our targeting decisions. - Behavioural Segmentation: we developed behavioural clusters that help us understand the behaviours that drive certain lifetime value states. - This primary segmentation was complemented with additional segmentation lenses for retail drive periods and the Home Services group as well as behaviour specific to the email channel. - Personalized & Relevant Communications: We introduced personalization and micro targeting into the existing seasonal drive period campaigns. Through analysis of sales patterns we identified which products were most popular during which specific weeks of the season. This allowed us to change the product offerings every week and make sure we were offering the right product to the right customer at the right time. - Optimising Marketing Spend and ROI: We designed and implemented a universal control group that was excluded from all addressable marketing touches. Ongoing comparisons of the behaviour of this group versus those of the customers who do receive addressable communications allowed the retailer to look at the comprehensive ROI of all addressable touches. • An offer engine that creates a broad repository of offers based on consumer insights derived from the segmentation, merchant experience and in-market tests. • An automated campaign management platform that allowed the retailer to manage the very complex tasks involved in sending highly individualized communications to a high number of micro segments across numerous channels. - We selected and lead the implementation of an automated campaign management system based on the Unica Affinium suite. This system will automatically manages marketing assets, segments and reporting, ultimately across four primary channels: Direct Mail, Email, POS & Mobile. Results • Customer Life Time Value increased by an incremental $75 million in 12 months • Next Logical Product driven ‘Trigger’ emails have generated up to 300% higher engagement metrics when compared with the ‘Business As Usual’ emails • Segmentation driven and highly targeted addressable communications generated up to 193% more return on marketing investment • Valuable insights into the performance of each segment have been captured for future campaign optimization

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