Step 1: Analyzing the Data
At the start of the relationship, Yes Lifecycle Marketing’s Analytics and Insights team went through a rigorous discovery process with the client by initiating a comprehensive data analysis designed to identify, size and prioritize customer and market growth opportunities.
The result from this analysis was a three-dimensional custom framework that included three layers of customer data:
- Total Annual Spend (how much money customers had spent with the brand)
- Lifecycle stage (were they new, dormant, reactivated, or core customers)
- Product category (did they purchase adult apparel, children’s apparel, or both )
This custom framework helped Yes Lifecycle Marketing’s team identify high-priority customer segments to dramatically impact the client’s marketing strategy, media spend and campaign performance.
Step 2: Identifying Areas of Opportunity
The three-dimensional framework based on customer total annual spend, lifecycle stage and product category preference, yielded 125 audience micro-segments and provided a massive opportunity to identify growth areas and maximize customer engagement and revenue. Yes Lifecycle Marketing’s Analytics & Insights team analyzed each of the 125 micro-segments to determine which ones were the most and least valuable and then developed communication strategies designed to maximize the return on investment of each segment. Findings included:
- 11% of the 125 micro-segments made up 23% of the total catalogue circulation and produced 63% of the revenue
- 31% of the catalogue recipients only produced 5% of revenue
- ‘High Value’ customers made up 20% of the client’s database but drove 62% of revenue
- ‘Low Value’ customers made up 50% of the client’s database but contributed just 12% of revenue
Step 3: Developing Insights and Strategic Implications
With these significant findings in hand, the Yes Lifecycle Marketing team developed comprehensive strategy recommendations to capitalize on the client’s best customers and maximize brand revenue.
The team calculated that the client would have generated 7X more sales if they had removed the lower performing segments from their catalogue circulation (they comprised 31% of the total circulation) and invested that budget into targeting prospect lookalikes of their most valuable customers through addressable marketing channels.