Different flavours of communication for different customers

The brief

The business was operating programmes of customer membership across Europe, covering over 40 markets but with most customers living in the major European markets.  Customer members accounted for over 25% of all revenues, from one in 10 customers actually buying products.

Members were being communicated with in the same way, regardless of differences in customer value, in the products they were buying or in the level of relationship.  With customers at the top tier of the ladder of membership spending an average of 20 times more than those at the basic membership level, there were huge differences in the value of an individual customer.

Strategy

To treat customers differently according to their value to the business, the products they were buying, and according to the level of relationship between the customer and the business.

Actions

At first it was important to validate our strategy through a customer survey with response incentivised through a prize draw, and with the promise of feedback of the survey results to customers responding.  Over 6,000 responses showed that customers were happy to talk to us.

The next stage focussed around testing our approach through targeting selected groups of customers to measure the level of take-up.  The results showed us that a performance improvement of up to +20% was possible.

So the roll–out of the strategy applied 9 messaging modules each with a clear objective.  Permutations of the 9 targeted different customer segments with messaging and offers carefully designed to appeal to them – driven by differences between customers by value, by level of membership and by product purchase history.  The use of modules made sure that we could manage cost efficiency despite becoming more personal in our targeting and more variable in our messaging.

The big difference

Nine months later open rates, clickthrough rates and response rates had grown by an average of +30%, doubling for some customer segments.  Revenue we tracked directly from response to offers had grown by +60% versus the previous year.  Plus we’d held back control cells of ‘no contact’ customers which our analysis showed proved that our communications were generating a return of over 40:1.

Click here to read more case studies from our work in the travel sector.  Click here to find out more about our Membership Marketing expert, Adrian Robertson.

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