Marketing Communication

StrategyAlison Golensky | Xinyu LiuQiulin Peng | Hang “April” Yuan

Table of Contents

❖ Executive Summary

❖ Cooper’s Hawk Business Model Analysis

❖ Wine Club Member Evaluation

❖ Marketing Objective

❖ Segmentation

❖ Strategy for Target Group

❖ Summary

❖ Appendix

Executive Summary Increase restaurant revenue via targeted marketing

Assignment: Establish a goal for CHWC and develop a marketing plan to meet that

objective

Solution: Based on CHWC’s business situation, our marketing objective is to increase

restaurant revenue by 8% ($166K) over the next four quarters

Strategy: We designed a marketing program for two key customer segments:

❖ VIP: Leverage these best customers to acquire new customers through WOM

❖ Active Small: Encourage them to explore more areas of the restaurant to

increase spending and frequency

CHWK Business Model EvaluationSubscriptions provide steady income, but the restaurant drives majority of revenue

Restaurant drives ⅔ of total revenue

CHWK Business Model EvaluationRestaurant revenue declined 7% last year

The restaurant revenue has declined

7% from year 1 to year 2

Business Model EvaluationRestaurant venue and visitation patterns

Visiting Weekday

Saturday and Sunday are the busiest

Visiting Month

August and December are the peaks

❖ Server room, bar room, and patio

drive 70% of revenue. The tasting

room drives 22% of revenue;

banquets 7%

❖ The top two areas with decreasing

revenue are tasting room (12%) and

server area (-8%)

Venue Type

Business Model Evaluation Wine Club Subscriptions

Variety (52%) and Red (33%) are the best sellers

⅔ of the members are in

level 1 and only ⅓ of them are in level 2

Level 1 avg spend $452 and level 2 avg spend $860

Subscription Level Wine TypeSpending

Wine Club Members on Social MediaMembers love sharing

75K people like thisHigh post interaction rate

2807 Followers3661 Likes

Avg. Rating of 4377 Reviews129 Photos

❖ Highly Positive Social Media Presence❖ Members think the main theme is sharing and celebration❖ Members like to sharing their experience and comments about Cooper’s Hawk

CHWC Marketing ObjectiveReverse restaurant revenue declines

Rationale:

❖ We chose to focus on the restaurant because:

➢ The restaurant is CHWC’s primary source of revenue

➢ The restaurant is the heart and soul of CHWC; engagement at the restaurant is critical to

continued membership

➢ Subscription revenue remains steady as long as customers remain in CHWC; restaurant

revenue has more incremental marketing opportunities

❖ With no marketing intervention, we can expect revenue levels to continue to fall in year three

Marketing Objective: Increase Existing Members’ restaurant revenue by 8% next year ($166K)

Member SegmentationCreated segments based on spend, visitation

Note: For more information about the segmentation process, please see Appendix Exhibit A

Segment Members Spend Per Trip Trips Per Year

VIP 742 $82 16

Active Small 1,790 $55 7

Lapsed Big 112 $113 10

Lapsed Small 1,621 $66 3

Total 4,265 $70 7

Population % vs. Revenue %

❖ Our first target group, VIPs,

generate the most revenue

❖ Our second target group,

Active Smalls, has the most

customers

Member Segmentation: Identifying Targets Target Groups cover 77% of total restaurant revenue

Note: For more information about the segmentation process, please see Appendix Exhibit 1

Segment 1: VIP OverviewAvg. Annual Spending: nearly $1.3K

Overview:❖ 17% of the total customers fall in this segment❖ 46% of the total restaurant revenue

Spending and Visitation Behaviors:❖ Very frequent customers: visit more than once per month ❖ Very active customers (0.3 recency; they came in less than 1 month ago)❖ The average VIP has experienced 3-4 of the five venues* within the

restaurant❖ VIP holds more banquet than other segments❖ VIP customers like to share on social media

*The five venues are: serving room, bar, tasting room, patio, banquet“Experienced” indicates at least $0.01 purchase in that area in the past 2 years

Segment 1: VIP CustomersAcquire new customers to have a $75K incremental revenue by Year 3

Behavioral Objective: Encourage VIP customers to actively share and refer Cooper’s Hawk to their friends and family to acquire 148 new customers next year

Communication Objective:Cooper’s Hawk is a perfect place to hang out with friends

Referral Program

❖ Send referral link through email and social media❖ Give VIP customers discount code or other incentives by successfully refer a

new friend to Cooper’s Hawk ❖ Holding “Sharing” event for VIPs to ask them bring friends with them to the

restaurant with discounted dishes and wine

Premium VIP service

❖ Offer premium wine tour for VIP customers

Segment 1: VIP CustomersIncentives/offers

Segment 2: Active Small CustomersAvg. Annual Spending: $370

Overview:❖ 42% of the total customers fall in this segment❖ Total spending is $1.31M, 31% of the restaurant revenue

Spending Behaviors:❖ Summer season lovers: 29% of them enjoy visiting the restaurants during summer

(Jun-Aug), especially in August (13%).❖ The average A.S. has experienced 2-3 of the 5 venues within the restaurant❖ Small order per trip: Active Small customers spend only $55 per trip❖ Low frequency: They visit the restaurant every other month; they might be busy

people or live far away from the restaurant

Segment 2: Active Small CustomersIncrease by $91K restaurant revenue by Year 3

Behavioral Objectives:❖ Increase average check size by $10 for 40% of visits❖ Drive one incremental annual visit from 50% of customers

Communication Objective:Cooper’s Hawk is a great choice that worth exploring: five unique food and wine experiences under one roof

❖ Provide bonus loyalty points to customers when certain things are achieved within a visit:

■ Offer 1) Patronize two or more venues within one trip

● Example offer: “Earn bonus points when you buy an entree in our dining room AND purchase two samples in our tasting room”

■ Offer 2) “Hurdle” check amount is met from any combinations of venues within the restaurant

● Example offer: “Earn bonus points for spending $70 or more”

Segment 2: Active Small CustomersIncentives/Offers via Loyalty Program Interface

Expected Financial Impact$47,400: 40% of 11,850 trips meet our $65 goal (represents $10 of incremental revenue per trip) through Offers 1 and 2

❖ Provide bonus loyalty points to customers when they make an incremental visit:

➢ Bonus Points for picking up wine on time*

➢ Off-season discount

Segment 2: Active Small CustomersIncentives/Offers via Loyalty Program Interface

Expected Financial Impact

$49,225: drives 1 incremental annual trip worth $55 from half of customers

*Drives incremental trip because this segment picks up their wine every other month on average

SummaryTotal Financial Impact: Meets $166K marketing objective

$172K total contribution through target marketing programs

❖ VIP customers Contribution: $75K➢ By new customer acquisition through WOM of VIP customers

❖ Active Small Customers Contribution: $97K

➢ By increasing active small customers visit frequency: $49K➢ By increasing spend per visit: $45K

Appendix

Restaurant Revenue (cut off point: 99%: 5206, 80%: 1476)

Restaurant Recency (cut off point: 1 month)

Monetary/Recency Active Lapsed

VIP M>=5206

Big Spenders 1476<M<5206, R<＝1 1476<M<5206, R>1

Small Spenders M<＝1476, R<＝1 M<＝1476, R>1

Exhibit 1: Member Segmentation Process

segment # Members Percent of Members

Valid

AB 699 16.4

AS 1790 42

LB 112 2.6

LS 1621 38

VIP 43 1

Total 4265 100

Exhibit 2: Results & Target Segments

Exhibit 3: Results & Target Segments

segment Avg. 2 Year Revenue Members Total 2 Year Rev % of Total Sum

AB 2356.9526 699 1647509.87 38.70%

AS 729.1137 1790 1,305,113.44 30.60%

LB 2247.5549 112 251726.15 5.90%

LS 461.332 1621 747,819.13 17.60%

VIP 7130.004 43 306590.17 7.20%

Total 998.5366 4265 4258758.76 100.00%

Exhibit 4: Results & Target Segments

2 Year Frequency

segment Mean N Std. Deviation

AB 31.1 699 13.347

AS 13.24 1790 7.351

LB 19.81 112 10.785

LS 6.95 1621 5.271

VIP 61.58 43 42.894

Total 14.43 4265 13.196

Exhibit 5: Results & Target Segments

Total Venues Visited in Past 2 years

segment Mean N Std. Deviation Sum % of Total Sum

AB 3.35 699 0.706 2343 20.60%

AS 2.74 1790 0.778 4905 43.10%

LB 3.2 112 0.721 358 3.10%

LS 2.22 1621 0.858 3598 31.60%

VIP 3.91 43 0.75 168 1.50%

Total 2.67 4265 0.901 11372 100.00%

Exhibit 6: Restaurant Analysis

Venue 2 Year Rev.

Server $2,050,149

Tasting Room $959,617

Bar $905,768

Banquet $316,807

Patio $79,657

Total $4,311,998

Exhibit 7: Wine Club Chart

Level 1 ($16.99 or $18.99 subscription)

Level 2 ($31.99 or $35.99 subscription)

% of Total Customers 68% 32%

Avg. WC Spending $452 $860

% of WC Revenue 53% 47%

Avg. RE Spending $831 $1,355

% of RE Revenue 57% 43%

Restaurant Recency 3.3 1.6

Restaurant Frequency 11.6 20.6

Exhibit 8: Wine Club ChartRE_amountsegment2 Year Mean Sum

1 133.926 28660.162 125.4634 24716.29

Total 129.8697 53376.45

AB

1 76.2366 1000147.532 76.0788 953952.51

Total 76.1595 1954100.04

AS

1 52.0514 642002.532 51.162 663110.91

Total 51.5957 1305113.44

LB

1 99.4974 131436.042 122.495 120290.11

Total 109.3036 251726.15

LS

1 63.0397 433649.942 62.9724 314169.19

Total 63.0114 747819.13

Total

1 66.0199 2235896.22 65.5627 2076239.01

Total 65.799 4312135.21