Download Getting to know retail customers

"Getting to know retail
customers”
Megan Fitzsimmons
Customer Insight Manager
OPSM Australia and New Zealand
About OPSM
• Australia’s largest optical retailer
• 290 stores in Australia & New Zealand
• Part of OPSM Group
– 620 stores across Asia Pacific
– Largest in Asia Pacific (excl. Japan)
• Eye wear & eye care
• 4+ million customers in ANZ
Business Issues
• Declining market share / falling volumes
• Strong growth objectives
• Customer database as untapped strategic resource
In order to grow revenue and maintain margins in a static market we are
going to have to make more from existing customers
Customer Portfolio Analysis
• Majority of customers only purchased once at OPSM
• Most have only purchased within a single product category
• we need to do a better job of cross-selling
• Long repurchase cycles (3 years)
• no compelling reason to shop more frequently
OPSM’s existing customer base is brimming with potential
Challenge: Need to change behaviours to increase purchase frequency
CRM Opportunity
• Four broad goals:
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Increase Retention
Shorten repurchase cycles
Increase cross sell
Grow share of wallet
Behavioural Segmentation
• Segmentation based on a hierarchy of key behaviours
• purchase frequency
• products purchased
• value
• Segments facilitate marketing action
• To move customers from low value segments to high value
segments
• Communications tailored to address needs at each segment
• Outcome is clear direction on how to improve customer
value
• more strategic approach
• more relevant contacts
Direct Marketing
• Communications plan to address key opportunities
• Shift strategic emphasis from mass marketing approach to
direct communications
• Need for greater range of communications
• campaigns tailored to individuals within each segment
• Limited by existing tools
• IT dependency
• long lead times
• limited flexibility
SAS
• New data warehouse
• Single customer view from 300 disparate sources
• Specific datamarts for
• Campaign Management
• Analytics
• Reporting
• SAS Campaign Management and Enterprise Miner
software
• Derived fields to calculate and flag customer status
• segment
• expected purchase date
• customer value
Marketing Automation
• Audience selection
• quick counts to test scenarios
• event triggers to optimise timeliness of campaigns
• Contact management
• contact rules to :
• control number of contacts for each individual
• control timing of contacts for each individual
• Response tracking
• response rules tailored by campaign
• real-time reporting
Marketing Automation
• Marketing in control
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more proactive, less reactive
more flexibility - time, audience, campaigns
more strategic - MA enables strategy
more efficient
We reduced campaign lead times from over 1 month to less than 2 weeks.
Analytics
Challenge:
To run more campaigns within same marketing budget
• Solution = improved targeting
• avoid wasting money by contacting customers that are unlikely
to respond
• ensure messages are relevant to customers
• improve campaign ROI
• $ saved can be reinvested into other campaigns
Analytics
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Pilot campaign to test benefits of analytics against existing
methodologies
SAS methodologies take top N% based on probability
Existing methodologies sample from total population
Analytics
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Pilot campaign to test benefits of analytics against existing
methodologies
SAS methodologies = 275% Lift in
Responses above control
Existing methodologies = 31%Lift in
Responses above control
Analytics
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More targeted campaigns improve ROI
Targeted approach
Mass marketing approach
Analytics
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Halved audience
Halved marketing spend
Improved responses by 70%
Improved incremental revenues by 213%
Delivered 1st year incremental revenue objective in
3 months!
Strategy Improvement
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Insights gained through modelling help us to better understand
customer behaviour
Continuous improvement gains as we model previous campaigns
Insights gained through improved campaign reporting help us to
direct efforts where benefit is felt
• most effective campaigns
• move funds away from above the line to DM
Strategy Improvement
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Improved customer metrics help us to track progress against broader
CRM objectives
– metrics are diagnostic not symptomatic
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Improved customer focus
• Determine goals from customer perspective not just to drive sales
• DM as medium to improve loyalty
– How do we create bonds if little-no contact in 3 years?
– Customers are 4x more likely to be cross sold if we contact
them directly