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Case Studies

Make sure I don’t lose customers to competitors’ new stores

Mailing Protects ~£500k in Potential Lost Sales

It would be a test of loyalty, and this retailer didn’t want to lose. Four of this well-known retailer’s stores in Hungary were going to be impacted by a takeover of its competitor’s stores. Knowing dunnhumby’s passion for loyalty and ability to gain unique insight, the chain engaged dunnhumby to ensure there was minimal switching and customer loyalty was locked in.

The insight

Using the retailer’s international local mailing budgeting tool, dunnhumby was able to:

  • Identify customers whose preferred store was among the four impacted
  • Tailor ‘Spend & Save’ vouchers for each customer loyalty group based on spend band (average basket spend per customer)
  • Show the expected costs of the campaign
  • Contact customers who are most loyal to the store so they won’t be lost to the competitor
  • Identify customers who have already stopped shopping altogether at the retailer in the six weeks leading up to the mailing

The action

Now that dunnhumby was able to identify the shopping patterns of the customers, it was time to make contact. A mailing went out to 48,100 of the retailer’s customers, containing ‘Spend & Save’ vouchers tailored to each customer’s recent shopping behavior. Each mailing booklet included:

  • Information about their local store and the store’s new extension features
  • Four ‘Spend & Save’ non-stretch vouchers (to reduce short-term ‘cupboard filling’) which could be redeemed one per week for a period of four weeks

The results

The proactive “Spend & Save” mailing to customers boosted loyalty and kept them coming back:

  • The sales uplift resulting from the mailing has contributed 2% (~£500k) to total like-for-like store sales across the redemption and post-period combined
  • Positive sales uplift was maintained versus control customers during (+9%pts) and after the redemption period (+4%pts) in impacted stores
  • Strong Sales to Cost Ratio (SCR) especially for loyal customers (4.0 SCR overall, 4.8 for loyals)
  • Loyal customers were really engaged with the non-stretch mailing with 35% redemption rate and 56% customer participation