Independent has a nice article about Clive Dunbumby, a pioneer in data-led marketing. His involvement in the success of Tesco's loyalty program is legendary.Here's a chance to learn from his experience on how to use data:
If knowledge is power then Dunhumby founder Clive Humby is a very powerful man indeed. Every year, the Londoner's data mining firm peers into a mind-boggling 100 million shopping baskets. The contents of those baskets are sorted by codes, fed seamlessly into powerful spreadsheets and analysed by a team of dedicated number crunchers.By the end, Dunhumby has an eerily complete picture of individual shoppers.
- "If you want to have a dialogue with customers, you have to have permission," says Humby, "we have permission".
- Humby says responses to tailored vouchers are far more positive than reactions to mass market campaigns, which ultimately means better value for customers.
- "Voucher redemption (for tailored messages) is 20 to 30pc -- mind-numbingly high," he says. "If something relevant is sent to customers, they're much more likely to use it.
- "Tesco without Clubcard is unimaginable," he says. "The loyalty data is such a valuable set of insights that it's used with a light touch everywhere.""
- Promotions on coffee don't work because people tend to be loyal to one brand, while beer promotions are a winner because shoppers are happy to try many varieties.
- Tesco's "Supplier Insight" programme is largely used as a bargaining tool, with the supermarket giant offering "blue data" to suppliers tracing general trends with no personal information, but Tesco also uses the scheme to encourage promotions for frequently overlooked customers like older age groups, in a nod to social responsibility.
- Humby stresses that while data mining works well in "high transaction businesses", it will never hold the key to retailing success."If you're stores aren't right, if you haven't got the prices right, then people won't shop," he says, "You can't exploit a loyalty card without the fundamentals."
My take: When you have data, you should first know what does it have as information & how to use it.Don't collect data that you don't know where you are going to use. You should also know what works & does not work - measure & understand everything that you do. Lastly, you should know it is not a magic wand for you to get customers to come back or buy more. You have to get your product right.
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