Digital marketing gets the lion’s share of attention, but it isn’t always the most effective form of outreach. For established brands with older customers, sometimes an old-fashioned physical mailer will be better received than a hyper-personalized video ad or push notification.
Even if the delivery vehicle is low-tech, retailers need sophisticated solutions to power their campaigns. For instance, Lucky Brand makes the most of powerful data analysis to reach every segment of its varied customer base.
Like many retailers, Lucky collects shopper data and uses it to study variables like shopping frequency and estimated customer lifetime value. The retailer leverages Custora and Amperity’s capabilities to enrich that demographic data, for purposes such as estimating a customer’s expected value in the coming year and determining whether they would best respond to physical or digital outreach.
“We use Custora to come in and basically tell us, out of our 6 million customer database, which segments are most likely to respond to the mailer, which is obviously more expensive,” said Mike Relich, until recently the COO of Lucky Brand. “Lucky is a pretty democratic brand, so we have the older customers that we have always had, but we also have younger Millennials. These shoppers are more likely to respond to digital marketing or social marketing, as opposed to older customers who like direct mail.”
These analyses also help ensure that each digital message contains the most effective offer based on attributes beyond the customer’s age. For example, price-sensitive shoppers receive tips about the latest sales and discounts, while customers who historically keep up with the latest trends get news about new releases or upcoming styles. Matching messaging to shopper attitudes helps boost margins by ensuring shoppers see offers that motivate their particular interests.
“If someone is coming in willing to buy based on price, but they’re really motivated by what’s the latest and greatest fashion you’ve got, why would you want to treat them the same as everybody else?” said Relich. “I don’t need to give them the promise of a discount to convert, but for other people I do need it. With Custora I can go in and segment those customers, and then I can market to them individually.”
Better Data Creates More Accurate Segmentation
Lucky also harnesses these solutions to ensure that its shopper data is clean, accurate and comprehensive. It’s easy for shoppers to end up in a loyalty database multiple times, which multiplies their purchases and makes them seem more valuable than they really are. Amperity helps the retailer ensure it has an accurate view of each customer, which is important when it comes to driving conversions: Relich recalled a recent campaign that called for 15 different personalized versions to maximize the response rate.
The solutions also enable Lucky to incorporate data from interactions other than transactions, such as analysis of Google searches, to truly understand every touch point between the retailer and its customers. This helps Lucky further narrow down specific shopper preferences in order to create profiles that offer more clarity than was previously possible.
“We now have the ability to stitch data from different data sources and create one view of that customer,” said Relich. “What we’re doing is we’re taking that data and feeding it into Custora, so rather than just giving them transaction data now we’re able to give them a composite of the customer where we’ve captured all interactions, and that helps us create better segmentation.”
These complete customer profiles further help Lucky narrow down the best recipients for its physical mailers, which reach 500,000 people in each campaign. Making sure the right shoppers receive the right message is important to the retailer’s continued success, whether it’s reaching traditional shoppers with paper coupons or developing the next generation of loyal customers through social media.
“We’ll send them a coupon or inform them of new products, and we get a fairly nice response rate, so it works quite well for us,” said Relich. “But if we start sending those to younger people, they don’t necessarily respond like they respond to paid social on Instagram or Facebook ads. Lucky is a democratic brand with a wide range of customers, and we know that we can’t rely on these older customers —they’ll eventually age out, so we’ve got to service our core base and then acquire new customers. We use this multi-pronged approach to say, ‘Okay, given the preference in the age and the demographic of these customers, let’s figure out the best way to reach them.’”