WHITCOULLS

CASESTUDY

A sophisticated customer loyalty program has helped Whitcoulls to achieve double the average transaction value (ATV) for its members compared to non-members.

THECHALLENGE
Whitcoulls is the leading specialty book retailer in New Zealand with 75+ stores nationally. Competition in the book retailing market was steadily gaining momentum and this iconic retailer wanted to take a decisive stance to retain its market share and protect profit margins. Their strategy focussed on developing a customercentric loyalty program that would both provide a better understanding of their customer base, engendering a closer relationship with their most valuable customers, and deliver a commensurate increase in share of wallet spent with the Whitcoulls brand.

THESOLUTION
Whitcoulls engaged Visible Results to create a bespoke loyalty program. The program design included strategies formulated to achieve the following objectives: Develop customer segments derived from life stage and purchase history to facilitate highly relevant communications Identify cross sell and up-sell opportunities in high-profit product categories Recognise highly valuable customers and ensure appropriate treatment to ensure high retention Offer attractive, exclusive benefits accessible only to members to drive high volume membership Recognise customers individual milestones, as well as key retail events to deliver a personalised experience for members Recognise at risk customers and reengage, reducing customer churn

The Whitcoulls Rewards program has allowed Whitcoulls to secure its customer assets and better monetise that member base through the knowledge gleaned Dave Fenlon
CEO of REDgroup Retail.

The chosen loyalty solution, utilising Visible Results proprietary loyalty methodology and Graphicard technology, provided Whitcoulls with the means to positively influence customer loyalty, analyse customer behaviour, track product/category purchases, monitor and report employee sales performance, and target their range of marketing initiatives to specific customer groups. Combining relevant benefits for the customer while helping to preserve retailer profit margins through ongoing refinement of data-driven campaigning, executed at the pace of retail, was paramount.

We set about a consultative process of discovery, conducting an audit that enabled us to understand the Whitcoulls business, program context and objectives which we then used as the foundations for program design. Sacha Castle
Visible Results Knowledge Manager

Visible Results New Zealand 7 St. Benedicts Street Newton, Auckland 1010

T : 64 9 980 9848 F : 64 9 980 9894

scastle@visibleresults.com

WHITCOULLS
THERESULTS - A Snapshot!
34% of all Whitcoulls sales are now attributable to Rewards members The average transaction value for a member is 93% greater than that of a non-member Member sales are currently increasing year on year by 20%

CASESTUDY

RESULTSBYOBJECTIVE
Six prime segments identified within the Whitcoulls Rewards base demonstrated very different lifestage markers and purchase behaviour. Overlaid with the Visible Results Customer Value Index, Whitcoulls can target new product release notifications to the most appropriate audiences, enhancing marketing efficiency, rather than merely broadcast communications.

CUSTOMER SEGMENTS

Through ongoing analysis of member basket mix, Visible Results were able to ascertain member purchase gaps in profitable product categories and move quickly to remedy. For example, Visible Results identified profitable members who, based on their customer segment allocation, should have been purchasing within the Fiction category but had not done so. Targeted with a Fiction offer, 41% of the responding members spent in the Fiction category during the campaign period recording a 36% uplift in overall spend when contrasted against the control group that were not contacted.

CROSS SELL & UP-SELL OPPORTUNITIES

The identification of these segments allowed us to shape our communications strategy to ensure members received communications that were valued, relevant and had a high degree of personalisation thus maximising response. This also allowed us to maximise our budget by reducing what could be wasted contacts, Catherine Collins
Whitcoulls Marketing Manager.

High Value members are identified based on a set of criteria within the Visible Results Customer Index and are selected for ongoing periodic offers designed to say thank you for being a member. For example, the email campaign conducted in December 2009 achieved an open rate of 59%, with 47% of those Members redeeming the associated coupon. These members spent 54% more than their high value peers who didnt receive the email, and visited twice as often during the campaign period.

IDENTIFYING & RECOGNISING HIGH VALUE MEMBERS

In addition to planning communication at a segment or customer value level, we have identified significant value in recognising personal customer events, by which customers are driven in store as a result of an offer thats compiled just for them. A recent birthday offer emailed to all members who had a birthday in the coming month achieved an open rate of 50% and a response rate of 35%. These members shopped nearly twice as often as the overall member base during the campaign period and spent 60% more.

RECOGNISING CUSTOMER MILESTONES

Knowing each members shopping patterns enabled identification of, and campaigning to, those members who had stepped outside their typical shopping behaviour and were at risk of becoming inactive. Such campaigns on average achieve an open rate of circa 29% with 15% of campaign recipients making 1.35 visits in the 28 day campaign period and 59% of respondents continuing to shop post-campaign.

PROTECTION OF AT RISK CUSTOMERS

In a recent membership drive, staff were able to sell in membership when a high value offer strictly exclusive to Whitcoulls Rewards was prominently promoted in-store, demonstrating tangible benefits of program membership, achieving a 390% increase in the average number of enrolments in 7 days.

EXCLUSIVE BENEFITS DRIVING MEMBERSHIP

Visible Results New Zealand 7 St. Benedicts Street Newton, Auckland 1010

T : 64 9 980 9848 F : 64 9 980 9894

scastle@visibleresults.com