Changing Customer Behavior Through Targeted Offers

Roundy's Case Study

Summary

Roundy’s marketing program offered special pricing and promotional benefits to all customers that over time had become meaningless. ALL customers were receiving the same treatment and benefits which resulted in subsidization of existing spend without driving incremental purchase. Our objective? Generate incremental revenue (through more visits and increased shopping basket values) in all customer segments through individualizing communications and incentives.

 

Insight

Analysis of over 1.5M households identified significant variation in shopping behaviors and opportunities for spending consolidation.
The result was the creation of communications that promised cash-back rewards if customers met weekly spend thresholds. (Cash-back reward was given once the spend was met for the next purchase use.)
Various material spend rates were applied based on each customers’ spend and desired spend rate. Marketing spend was reallocated based on a customer’s current value and calculated future value.



Roundy's Case Study

Idea

Improve customer engagement and value through analysis of purchase behavior and targeted incentives to drive trial for increased spend.
 

Optimization

  • Client learned who their best customers were and could identify them
  • Program spend reallocated to focus on customers with most potential
  • Greater customer participation yielded incremental measured revenue



Roundy's Case Study

Results

  • 19% revenue increase
  • 20% more store visits
  • 15% more departments shopped
  • 20% profit increase