Case: Fact-based marketing in e-commerce
Building customer segments to personalise marketing campaigns
- Central Marketing Database
- Customer Profiles
Since its establishment in 1995, Body & Fit has grown into a leading e-commerce player in the Benelux, Germany and France when it comes to sports nutrition, nutritional supplements and diet products. Via its webshop, the company offers one of the most comprehensive product ranges consisting of more than 4,000 products from 300 top brands, including its strong house brand. Body & Fit can serve its customers swiftly because of its own distribution centre in Heerenveen.
The challenge of personalisation
Increasing customer loyalty by approaching customers in a more specific and more relevant way, based on advanced customer profiles and by centralising all customer data.
A Central Marketing Database and analysis environment in the Cloud so that advanced analyses can be carried out and comprehensive customer profiles can be created for campaigns, based on the output.
Much better campaign results and continuous insight into how customer groups and campaigns perform, enabling immediate adjustments to be made.
From one-off to recurring
Body & Fit is very successful in attracting new customers for its webshop via social media campaigns, online advertising and search engine optimisation. Despite this, some customers only stick to that one purchase. Moreover, some website visitors proceed to open a webshop account but never buy anything. Therefore, there was potential to optimise this group and to develop them into loyal, recurring customers.
Customer data and purchases are recorded in the Magento e-commerce system. Body & Fit’s marketers were not able to make smart selections based on the data in Magento. Moreover, they were unable to incorporate the customers’ online behaviour in their analyses. Campaigns were, therefore, limited to generic bulk emails to customers who have opted in. ‘Since we wanted to reach specific target groups with personalised offers, we felt the need to make selections that are way more advanced’, explains Fritjof Haalboom, Head of Technology at Body & Fit.’
‘Since we wanted to reach specific target groups with personalised offers, we felt the need to make selections that are way more advanced’
Therefore, a Central Marketing Database was started, in conjunction with Crystalloids, where all data relating to customers, purchases, online behaviour and campaign results could be recorded. The result is a 3600 view of each customer, with which purchase behaviour can be analysed and predicted. This Central Marketing Database was created in the Cloud on the Amazon Web Services (AWS) platform and meant that data from a system like Magento is available to marketers in real-time via a link to standard APIs. Fritjof Haalboom: ‘This enables us to adjust campaigns immediately, based on the results. If we launch a promotion that involves a discount coupon we can immediately see how this will affect our turnover. We can also compare different variants of that promotion.’
‘Using a Central Marketing Database enables us to adjust campaigns immediately, based on the results.’
Body & Fit and Crystalloids are implementing the project in demarcated phases. In the first phase, Magento was linked to the Central Marketing Database on the AWS platform and KNIME, the advanced open-source analysis environment, was implemented. The focus in the second phase was on obtaining insights into customer behaviour. An RFM (Recency, Frequency, Monetary) analysis was conducted and a Customer Lifetime Value model was developed. Marketers can use this model to differentiate between valuable customer segments and can use them in the contact strategy. Finding new insights will be emphasised even more in the next phases, by linking other data sources, creating dashboards and building advanced analysis models. In addition, Crystalloids will manage the solution and continuously monitor the data in the Central Marketing Database. For this, Crystalloids’ DataOps methodology principles will be used to the greatest extent possible.
Transitioning from a gut feeling to facts
‘The most important result, perhaps, is that we now work based on facts instead of a gut feeling. We have come to realise, for instance, that the body-builders’ segment is much smaller than we initially thought. The Central Marketing Database gives us the possibility to recognise valuable customer groups and to bind them to us through a personal approach’, explains Fritjof Haalboom. ‘Our focus now is on several important basic insights concerning customers and products, and we plan to use these insights to expand our strategy further. We will also promptly be adding data from our mailing system, website and call centre.’ One of the first campaigns to be initiated was a campaign for customers who had not bought anything in over six months. The results were promising, and a thorough evaluation of the campaign also resulted in improvements to the campaigns that will follow this one.
‘The most important result, perhaps, is that we now work based on facts instead of a gut feeling.’
The Amazon Web Services Cloud platform (Amazon S3, AWS Lambda, Amazon Redshift, Amazon EC2 and Amazon QuickSight) and the KNIME Analytics Platform.