Personalising the
© dunnhumby 2011 | confidential
Personalising the customer’s experience
Clive HumbyChairman, dunnhumby
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© dunnhumby 2011 | confidential
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Clive Humby andEdwina Dunn
found dunnhumby1989�2 2001
dunnhumby / Tescocommercialise ClubCard insight
�140 2003
dunnhumbyUSA opens - Kroger
�250 1995�30
Tesco and dunnhumbylaunch ClubCard
�700 2007
dunnhumbyFrance opens - Casino
�1500+ 2010
© dunnhumby 2011 | confidential
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£350m+ revenue from 150+ clients
© dunnhumby 2011 | confidential
24 countries and growing
Europe, Asia, North America, South America
1500+ employees and growing
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dunnhumby’s “win win win” approach
Retailer Value Creation
Proposition: Grow Like for Like sales and Net Margin via better decisions throughout the business
Model: Private service team for retailer
Insights to Suppliers Media to suppliers
© dunnhumby 2011 | confidential
Proposition: Sell the unique customer data
asset to suppliers through customer reporting
and analysis service
Model: Collaborative 50:50 profit sharing
Proposition: Sell targeted communications
(Statement and interest mailings etc) and in
store media to suppliers
Model: Collaborative 50:50 profit sharing
More Relevant Customer Experience
Customer experience is improved; channel, promotions, products, prices and communications
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to help brands and organisations engage more completely and profitably with their customers
by developing customer based action plans built on
integrating “real-time” data
© dunnhumby 2011 | confidential
integrating “real-time” data insights, creativity and change capability
so delivering increased brand value to our clients
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Customer Data
Customer Insight
Customer Management
Long Term Customer
Loyaltyenables...to
drive...
to grow...
Customer segmentation Communication strategy
– Retention
Increased Customer
Clubcard has enabled Tesco to know their customers
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– Lifestage
– Value & Loyalty
– Lifestyles
– Retention
– Growth
– Win-back / prospecting
Business strategy
– Price
– Promotions
– Ranging
– Availability
Customer Lifetime Value
– Sales growth
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What do we need to understand?
AttitudesDrivers ofBehaviour
Behaviours Transactions Profit
Focus on profit leads to little
relevance, increasing issues of
Focus on attitudes is difficult to convert
into driving behaviour and profits
© dunnhumby 2011 | confidential
relevance, increasing issues of
customer churn and dissatisfaction
into driving behaviour and profits
Understand what customers want
Become more relevant
Keep customers engaged for longer, engender trust,
long term loyalty and drive value creation
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more information
more choices
exercising choice gets quicker and easier
Customers don’t get stolen …they walk
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exercising choice gets quicker and easier
if you want to protect and enhance your brand value
your offer must be relevant and valued
Customers are now data savvy, they see clearly where you
fail to make the engagement relevant
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How do we achieve Relevance?
● What are the key attributes of the products you choose?
● What are your favourite purchase channels?
● When you buy
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● Promotional Behaviour
● Clubcard Offers
● Clubs
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Segmentation allows us to build this picture for millions of customers
LifestageApplication form, what they buy
Shopping
HabitsShare of shopping, Recency & frequency
LifestylesMotivations behind shopping behaviour
“You are what you eat”
Primary ChannelPreferred format (Supermarket, Express, On-line, Petrol)
Brand AdvocacyParticipation in extensions (Tesco.com, TPF, Baby Club, Wine club)
Promotional PromiscuityCherry picking deals, bulk buying to larder fill
ProfitabilityBrand choice, packaging preference, weight of purchase
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eat”Baby Club, Wine club)
This is how our customers behave.
AttitudesDrivers of
BehaviourBehaviours Transactions Profit
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Pareto is almost right in Grocery
Valuable
Premium
% active customers
%
sales
8% 34%
14% 31%loyal
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Potential
Uncommitted
25% 22%
43% 11%
Lapsing 10% 2%
opportunity
lapsing
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this is a friend we know…
– she is a busy young lady
– she looks after her health and loves fresh produce
– she drives to the supermarket on a Saturday morning
– she reads Hello Magazine
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we know 176m people around the Globe as well as we know Miss Jones
– she reads Hello Magazine
– she has a cat
– she doesn’t pay attention to the price of products
– she does look out for promotions
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3
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lifestyles are built from “DNA profiles”
Miss Jones’s DNA Profile: a “time-poor, food-rich” customer
– 25,000 products are used to create a customer’s DNA
– we have a DNA profile for every single customer
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-1
0
Adven
turo
usBig
Box
Bra
nded
Calor
ie C
ount
ers
Calor
ie L
oade
rs
Conve
nein
ceFi
nest
Fore
ign
Fres
hGre
enH
ealth
yH
igh
Price
Kids
Long
Life
Loos
eLo
w Pric
eLu
nch
BoxM
eat
Pre P
acke
d
Cooki
ng fr
om S
crat
chSm
all B
ox
Tesc
o's
Own
Trad
ition
alVa
lue
Vege
taria
n
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We will talk to customers in different ways…
loyal opportunity newlapsed
quarterly statement
coupon at the till
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local store mailings
clubs
thank you
trade driver home mover
slippage
win back
prospecting
welcome
FS
Promotional Flyers
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Key levers for the retailer and CPG?
● Right mix of good prices & great promotions
● Right range of products on the shelf
● Successful New Product Developments
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● Successful New Product Developments
● Good service in the store
● Relevant personal offers and rewards
● Reacting to changing customer needs
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What a bargain, I’ll
sssss ss ss ssss
sssss
Now what’s ss
sssssss sssss
ssss sssss
Gsssss sssss sss
ss
sssssssss ssssss
Promotions have different impacts on customers
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Pssssss I ssss sss
ssss
sss sss ss I ssssss
ss
Psssssssss Wsss
ssssssssss
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Promotions – what is the right mix & discount?
100
120
140
160
180
200
Cherry Pickers
Trialists
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0
20
40
60
80
100
Full Price Upto 30% 30% to 40% 40%+
Trialists
Repertoire
Loyals
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� improved reach
� improved balance
More effective flyer promotions
Reward Anchor• Broad Appeal• Large Associated Sales• Medium Baskets
Incentive Anchor• Middle Appeal
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� improved balance
� improved return
• Middle Appeal• Large Associated Sales• Medium Baskets
Low End Helper• Low End Appeal• Small Associated Sales• Medium Baskets
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Optimised merchandising in cleaning products
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increased facings of low end products at price sensitive stores
Sales increase +16%Units increase +48%
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Retailers today… relevant communications
Loyalty
Themed Mailings Magazine
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ClubsCoupons @ Till
Web & Internet
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Clubs allow us to develop more in-depth customer relationships
In the UK we have 4 customer Clubs:
Baby & Toddler
Food
Healthy Living
World of Wine
Clubs provide relevant information and offers
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Clubs provide relevant information and offers
Significant supplier interest
dunnhumby provide targeting and sourcing of offers
Give permission to engage more often
Customers who join Babyclub spend an additional 10% above
other customers having babies
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We can populate “My favourites”
from your store shopping
Increasing “click through” and reducing “abandoned” visits
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What’s changing
● Focus on protecting your loyal customers– Increased promotional activity across categories
– Trading down to Private Label or cheaper lines
● Promotional Activity– Some categories are 50%+ volume on promotion
– Surge in “Cherry Pickers”
– Educating consumers to look for deals, have we taught customers a new
© dunnhumby 2011 | confidential
– Educating consumers to look for deals, have we taught customers a new paradigm?
● Recognise huge “headroom” in trialists and repertoire shoppers
– NPD cycles are getting shorter
– Stop thinking “my customers” and “his customers”
– Most consumers have broad repertoires in most categories
● Develop annual communication plan for your brands and integrate with retailer trade plans
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... making data make sense ...
market
research
new product
analysis9
£800,000
£900,000
£1,000,000
£2,500,000
£3,000,000
Total Archers Aqua
Total Bacardi Breezer
Total Gordons Edge
Total Smirnoff Ice
Although category sales are very seasonal 23 week
pre v post sales remain stable at £16.5 millionLaunch of diet lemon
loyalty
measurement
promotion
analysis
using data insights with suppliers and vendors
© dunnhumby 2011 | confidential
tailored
analysis
The Shoptargeted
communicationrange analysis
media
planning +
evaluation
retailer / dunnhumby£0
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£500,000
£1,000,000
£1,500,000
£2,000,000
Total Smirnoff Ice
Total WKD
Other FABs
Total Category
© Copyright, dunnhumby 2003 — confidential
Bacardi Breezer
promotion
Cate
go
ry s
ale
s
Bra
nd
sale
s
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What your loyal customers are worth versus occasional users ?
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What are the right tactics to build the brand?
Brand
Share
Stimulate growth Protect Share
& encourage growth
Protect Share
& Reward
Stimulate growth
Encourage
Repeat Behaviour
Stimulate
Increased
© dunnhumby 2011 | confidential
Category
Usage
Stimulate growth Repeat Behaviour
Grow Brand & Category
Increased
Share of Wallet
Non Users Stimulate Trial Stimulate Trial
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What are the right tactics to build the brand?
Brand
Share
Stimulate growth Protect Share
& encourage growth
Protect Share
& Reward
Stimulate growth
Encourage
Repeat Behaviour
Stimulate
Increased
LOYALSLIGHT LOYALS
REPERTOIRE
© dunnhumby 2011 | confidential
Category
Usage
Stimulate growth Repeat Behaviour
Grow Brand & Category
Increased
Share of Wallet
Non Users Stimulate Trial Stimulate TrialOCCASSIONAL
REPERTOIRE
PROSPECTSNON USERS
DABBLER
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Use different mechanics for different shoppers
Incre
asin
g lo
yalty
MEDIA PLAN
1 2 3
SH
OP
PE
R S
EG
ME
NT
PROTECT
GROW
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Incre
asin
g lo
yalty
SH
OP
PE
R S
EG
ME
NT
ACQUIRE
REACTIVATE
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Summary
● We are in an age of real-time, in-depth insights &
targeted communication to consumers
● Consumers get “data”– They understand the loyalty “contract”…
– Relevant messages from their supermarket, Amazon, eBay etc.
– Are you being relevant to them?
© dunnhumby 2011 | confidential
– Are you being relevant to them?
● What are you doing to be more relevant?– With retailers as a partner you can understand the consumer
better
– We can engage customers through better promotions, range
and communications
– Do you use the data and show its value?
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© dunnhumby 2011 | confidential
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