By Kieran Kern
It takes more than a great haircut and head massage to connect a customer to a brand. Indeed, it is more important to massage the messages and opportunities a business provides customers based on where they are in their purchasing journey.
For Minnesota-based Great Clips, advertising and marketing success come from applying data to provide the best messaging and discounts for specific groups of customers and potential customers.
Stirista CEO Ajay Gupta shares about the role his company played in Great Clips’ advertising and marketing strategy. They handled online media buying, including paid social and web advertising strategy. Stirista’s ‘claim to fame’ is their ability to map social and online identities to postal and physical addresses, thus forging a singular identity graph.
They matched physical customer records with online identities and segmenting the records into various buckets for online ad placement for Great Clips. “The data buckets are designed to segment customers so those who will come to Great Clips anyway do not require a coupon incentive,” explains Gupta.
The Great Clips customer journey has three essential steps. Prospect to New (P2N) targets potential customers with specific geographic and demographic characteristics to get them in the shop. New to Better (N2B) denotes the semiregular customer. A Better customer is defined as visiting two to three times per year. Better to Good (and Great) (B2G) focuses on improving an existing customer relationship. A Good customer visits four to six times per year. Seven visits and beyond characterize a Great customer.
The creative for Great customers differs from that for Better and New. Great customers may be engaged with a funny video or a branded postcard reminder. Customers who are invested less in their haircuts or have low brand loyalty are targeted with discounts on the likely date of their next haircut. Absent customers receive even greater incentives to come through the door.
“The entire program requires the right creative to be matched to the right data bucket on the right week the customer may need a haircut; it is the finest example of how data, analytics and creative blend together to create a very tight-knit program without wasting coupon dollars,” Gupta shares.
Great Clips’ critical success metric is profitable incremental visit growth across their three segments, each measured against a control.
With the Acquisition Program, Transition Customer Return, and Win-Back generating 2 percent, 4.2 percent and 3.8 percent incremental customer visit growth respectively, their objectives were met and exceeded, and new controls were set. The increased visits translate into 140 percent ROI for P2N, 315 percent ROI for G2B and 295 percent ROI for B2G.
For the last two decades, Stone Arch Bridge Group has helped Great Clips effectively apply discounts to grow customer counts incrementally and profitably by building and managing the chain’s Customer DataMart. They exclusively use clients’ customer transaction information to drive growth through 1:1 marketing promotions that pay back the entire investment, including the discount, in less than 12 months. These personalized programs, which also include age, family and gender specifications, consistently outperformed the single message/creative by 30 percent.
“Each customer and prospect is updated weekly and placed into marketing segments that may/may not be provided discounts based upon their visit recency, frequency and personal haircut cycle,” explains President Douglas Donaldson.
One important data point is the return rate of each segment — for example, the Great customer returns to the same salon 92 percent of the time. According to Donaldson, discounting should be applied disproportionally to the Prospect, New and Better customers to habituate the customer to becoming Great customers. Depending on their key metrics, “…whether we are doing ‘Win Back’ or ‘Second Visit’ dictates that level of discount applied.”
The success of Great Clips’ advertising and marketing strategy is a perfect example of merging data and marketing. Targeting defined groups of customers on multiple platforms and measuring them against individual business objectives allows the company’s 1,231 franchises and 4,165 locations to increase ROI substantially.
“This is 21st-century data-driven marketing. 1:1 personified," says Gupta.
Join Gupta and Donaldson, along with Heather Briggs, senior director of Marketing at Great Clips, for more insights at a session called “The Great Clips Customer Journey: Consumer Engagement through Smarter Data Analysis.“
Click here to register for LeadsCon Las Vegas 2018.