HOMEBASE USED DATA PATTERNS TO DELIVER PERSONALISED CUSTOMER SUPPORT FOR DIY-ERS
BACKGROUND Home improvement projects outside of key seasonal drivers, are irregular and unpredictable. Part of Homebase s marketing strategy had been to promote everything and discount on a frequent basis. The direct marketing strategy had been built around monthly high volume event mailings with blanket discounts. Where targeted communications were used, it was taking eight weeks to go from data point collection to comms delivery. Homebase had fallen into a cycle of promotion and discounting, with a focus on improving the 9% response rate ignoring the 91% of non-responders and overlooking the fact that they obtained less than 50% share of wallet for many customers. 2
SOLUTION The Trigger programme turned the old approach on its head and put the customer at the heart of its thinking. In partnership with their agency MRM Meteorite, the new thinking delivered a step change in Homebase s marketing strategy and communications. Understanding a customer s need (or intent) for any given home or garden improvement task meant Homebase could initiate, maximise and acknowledge the projects that customers went through and grow customer lifetime value. By finding patterns in shopping behaviours in both transactional and nontransactional data it identified customer needs as close to spending opportunities as possible. The ability to make unpredictable behaviour predictable, led to the plan to spot specific behaviours that indicated a future need, then act quickly to prompt further spend, growing what was called Share of Project. After over 750 hours analysing different product, purchase and non-purchase behaviours, web browsing and other indicators, 10 project behaviours were identified. The analysis showed the length and shape of the sales curves and quantified the opportunity. For each, they created a communication plan personalised around a product the customer had purchased, and the opportunity. This built on the recognised data knowledge that, a customer buying a kitchen would also eventually need tiles, flooring, lighting and paint. But it went further to identify new insights, for example, people who bought birdseed were found to be eight times more likely to be considering a new kitchen. These insights were then used to initiate purchases. Responding quickly enough to be relevant was critical. By evolving data management and fulfilment processes (with no new systems or budget) Homebase was able to get direct mail delivered within six days and email in two. Dynamic templates made the communication truly personalised. The communication used the purchased product as the feature image, highlighted local store details and included offers that were competitive in that area. This very personalised CRM programme provided highly dynamic communications and unique communications for each customer ensuring the brand delivered the right message at the right time ultimately increasing customer value. 3
Through the ten integrated DM, email and store programmes Homebase created engagements and activities that recognised a customer s lifecycle, lifestage, behaviour and value. First time shoppers, seasonal purchasers and frequent visitors became part of the lifecycle programmes that welcomed and maintained regular contact around season or interest. And relevant offers were targeted to those at signifi cant lifestages such as moving home or retiring. Highly responsive DM, email and at till communications were triggered by spend and non-spend behaviours in order to maximise the brand s share of a specifi c project. And magazines, emails and inspiring shareable content were created to increase customer value further. Homebase developed a hierarchy to determine customer inclusion in a programme and used dynamic content to deliver a message to suit their interest or project. 4
RESULTS The strategy has been transformational. The evolved CRM programme has delivered incremental sales four times greater than it did three years ago ROI up 350% to 4.3:1. The new CRM strategy smashed the profit target by +48%. All ten programmes exceeded targets sales 17%, profit 20% and ROI 22%. The focus on timely and relevant communication has created a demonstrably more engaged and valuable customer in terms of both total spend and activity for example DM response increased from an average of 9% to a maximum of 46%, up 500%, ATV increased by 13.5% and repeat visits up 6%. Sources: DMA Best Multi-channel CRM programme Gold Award 2014, DMA Data Strategy Silver Award 2013, Marketing Week Engage Award Winner CRM/Loyalty and Direct Marketing 2014 Homebase and MRM Meteorite 5