50% GROWTH IN TARGET CUSTOMERS: DIRECT MARKETING STRATEGY REDUCES 18 TO 5 MONTHS

Background:  

Revamping the marketing mix was essential, as it had become overly reliant on excessive catalog circulation and was not attracting a younger consumer base. Established KPIs for the customer file, connecting them to profitability metrics and redefined customer acquisition cost (CAC) and retention targets. Then thoughtfully incorporated digital tactics and scaling back catalog circulation, we achieved file growth at a more profitable rate, effectively reshaping the brand's growth.

Challenge: 

The media mix heavily relied on catalog touchpoints, leading to limited growth in the target customer file. Digital media/video efforts were falling behind industry and competitors.

Solution: 

Leverage data driven approach to protect existing file while delivering new customers.

• Diversify media mix to include digital and video efforts

• Data-driven segmentation to keep customers on positive path

• Optimize marketing mix to meet established goals

• Develop tools and rigor for performance measurement

• Test and iterate, then test and iterate again!

Results:

• Turned around catalog CAC ratio of 18-month payback to a more attractive 5-month payback.

• Drove incremental revenue and New to File in digital tactics.

  • Media investment scaled without a decay in CAC ratio

  • Added consideration media to portfolio expanding into video

• Grew acquisition of target customer 50% when looking at period over period; NTF customers had a 20% increase in cart value and improved repeat purchased rate