Inspiring your customers to engage with your brand

Dominic Panetta

Senior Manager - Marketing

Australian brand

Retail franchise system

Franchising since 1997

~60 stores (Aust)

International presence

Storage & organisational products

Key Brand Strategies

BRAND

ESSENCE

Organisation

POSITIONING

• Upper market

• Specialist

• Premium/Quality

• Customer

service

VISION

To be the clever

place to

organise any

space

Core Target

Female (80%+)

30-50 yrs (60%)

Married / De-facto (80%)

Live in a house (80%)

Have young children at home

‘Chief Purchasing Officer’

Her money: 70% working (FT or PT)

Online is her primary information

portal

Creating Engagement

2009: What do we REALLY know about our customers?

What they spend on average? / For how long?

How to get them to spend more?

How regularly they shop with you?

How to get them to come back more regularly?

What proportion of your customers are repeat?

What products they are most interested in?

Why a customer stops shopping with you?

What is a loyal customer worth to you over time?

Why?

How?

Barriers

Objectives

Launch

Current Status

Influencing customers

Learnings

Inspirations Reward Program

Research confirms that successful programs have evolved from cost centres into key profit drivers, and provide a key competitive advantage for brands.

Loyalty programs are a real business imperative for driving brand loyalty.

Consumers saying they are more active and engaged in a brand with a loyalty program.

Why a Reward Program?

For Love or Money 2015. Directivity and Citrus

46% of customers want HSW to introduce a loyalty program*

Our customers wanted a reward program

* 2009, n5,000 - existing e-newsletter recipients + focus groups

Move from mass marketing to

targeted marketing

BIG data

Understand our customer's buying behaviours to tailor our future

marketing activity.

eNewsletter survey (existing customers)

Focus groups (existing & non-existing customers)

Store owners

Outcomes:

Keep it simple

No points

How was Inspirations developed?

Overcoming barriers to success

Overcoming barriers

Budget

Franchisee

acceptance &

commitment

CRM System Expertise:

- Internal staff

- External

partners

Store staff

training

Store

Compliance

Objectives

Attract NEW

customers

Efficient &

effective

marketing

communications

facility

Increase their

Lifetime Value

Retain our

best customers

Positive

word-of-mouth

Free to join

No Cards / No points

$10 ‘Welcome’ Voucher

$10 ‘Reward’ Voucher for every $200 spent

Birthday Voucher

VIP Shopping Events

Member-only Competitions

Product reviews

Workshops

Member Benefits

Launched October 2010

Total Members 524,370 (85%+ Female)

– ‘Activated’ Members 78% = 410,020 Members

– Non ‘Activated’ Members 22% = 114,350 Members

Registrations ~9,000 / mth (5% via online)

Avg visitation 5.5x PA (4x non members)

% of Total Turnover ~45%

Inspirations: Current Status*

*At end Feb 2016

Average Member transaction value

Voucher redemption rate ~35%

Inspirations: Current Status*

Member

$76

With

Voucher

$831

Non

Member

$58

*At end Jan 2016. 1. Net value, after voucher.

Influencing (inspiring) customers

Inspirations website

Interactions (last 12 months)

350,000 12 million

eDMs

11,000

Help Desk

interactions

1.2 million

page

views

AMP Capital Shopping Centres - Recommended Retail Practice Report (2014):

“79% of Australians say email contact is the best form of communication from retailers.”

Average open rate =

33% - 35% – Industry avg = 25%

Why?

Inspiring images / solutions

Member offers

Relevant content

eDM Results

Member Offers

* v prior like-period

+300% Quantity

sold*

3-4x per year

– Tactical timing

> traffic / sales

Double the purchase value

Earn a Reward Voucher faster

Inspirations Double Rewards

Double Rewards - National Sales results

FEB 2015 APRIL 2015

JUNE 2015 OCT 2015

* Member sales v previous week

+30% Sales*

Content marketing - Blog

Inspiration / How to / Expert advice

Content marketing

Local Area Marketing initiative

Slow start, now a major activity

Special Occasions

– Christmas / Mother’s Day / Store Birthday

Results (Christmas 2015):

42 stores participated

>1,200 members attended

>$75,000 incremental sales

VIP Shopping Events

Local eDMs

Local Area Marketing – eDM Case

Study

8-week eDM program – Product of the Week

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

Week1

Week2

Week3

Week4

Week5

Week6

Week7

Week8

Week9

Week10

Week11

Week12

Week13

Week14

Week15

Week16

Week17

eDM1

eDM2

eDM3

eDM4

eDM5

eDM6

eDM7

eDM8

Local Area Marketing – eDM Case

Study

>$11,000

incremental

sales

Results: ~100% sales increase* * v prior like-period

Mobile

Marketing

Late 2012: Introduced SMS ‘reminders’:

Registration Activation

Voucher expiry

Happy Birthday ($10 Voucher)

SMS Marketing

Avg number of vouchers issued 26,000*

Avg Voucher Redemption rate ~40%*

Avg Sale with Voucher = $75 @ 40% $780,000

September 2014

Saved: ~$1,200

Avg voucher redemptions declined >1,000

Lost revenue ~$75,000

SMS Marketing – the value of influence

* Jan – Aug, 2014

Surprise and Delight

Member Lifecycle strategy

Targets: ‘Super Members’ (T1 & T2) / ‘Lapsed

Members’ (T4)

Objectives:

– Help retain our very best customers (recognise and reward)

– Win-back ‘lapsed’ customers

– Drive incremental sales Mthly re-

engagement

Annual ‘surprise’ engagement

Voucher value

When sent

Validity

Min Spend

T4 ‘Lapsed’ Members

$10 voucher

Monthly

1 month

$30

T1 ‘Super’ Members

$20 voucher

Sporadically

1 month

None

T2 ‘Best’ Members

$10 voucher

Sporadically

1 month

$30

~$26k

~$18k

~$90k Jul-

Oct

~1%

~1%

~75%

~23%

Super Members

(T1) Howards Lovers

(T2)

Core (T3) – no additional reminder activity

Lapsed Members

(T4)

Non-activated

Member Lifecycle Strategy

NEW Member Rewards

Objectives

Refresh the Inspirations program

Attract new Members

Engage Existing Members and HSW Store staff

Drive sales via additional rewards (other than HSW Vouchers)

3rd Party Member Rewards (FY15 initiative)

3rd Party Member Rewards

1 Bonus Reward

2 Member-get-Member

3 Surprise and Delight (best Members)

Objectives:

– Upsell opportunity the existing $70/$80/$90 shoppers

– Attract new Member registrations

Incentive: Spend $100 / Receive a bonus reward

– Reward choices: Movies passes / Family Day out / Sports lessons

Occasions: 3x during FY15

Duration: 1 month each (2mth voucher validity & multiple usage)

3rd Party Member Rewards

1 Bonus Reward

Objectives: Encourage NEW shoppers to register / increase Membership numbers

Incentive: Existing Members invite 2 friends to register. All 3 receive a choice of a Beauty Gift Voucher or Golf Voucher

Duration: Monthly ongoing

3rd Party Member Rewards

2 Member-get-Member

Objective: Pamper our Top 1,000 Members

– Brand Ambassadors / create positive word-of-mouth

Incentive: Top 1,000 Members receive a personal phone call on their Birthday and offered a choice of: - $30 Beauty pamper gift voucher - $30 Inspirations Voucher

3rd Party Member Rewards

3 Surprise and Delight

our very best Members

3rd Party Member Rewards - Results

1 Bonus Reward - did not work

2 Member-get-Member - did not work

3 Surprise and Delight (best Members) –

very well received

What’s Next?

SMS or eMail notification? (linked to landing page)

Member Survey

FY17 SMS Marketing

Member Offers

Instant Voucher redemption

IT / Network / CRM upgrades to allow real-time voucher issuance & redemption

Tiered Membership?

KIS: Keep it Simple – Registration requirements / Points / Rules

Financial Liability – points-based / liable until expiry

CRM software – commitment

Constant development required – Not ‘set and forget’

Trial & Error

Persist encouraging store participation

Lessons Learned

Australian Marketing Institute 2013

Award for Marketing Excellence:

Loyalty Programs

Award Winning Program

In the News

Marketing Magazine

Experian Case Study

Inside Retail

Thank you