Are you fully leveraging your CRM system? During the second keynote of DMA’s 2018 Marketing Analytics Conference (MAC), attendees heard how successful CRM segmentation and customer personalization delivered effective marketing for lower cost.

In mid-2017, the head of marketing for Aaron’s was pursuing new analytics tools and marketing segmentation. In a 2.5 hour meeting, the marketing team, analytics team, and their external consulting partner were brutally honest about the challenges they faced. In the next year, their goal was to increase overall revenue, but they were facing a slashed marketing budget.

Their consultant was not shaken. “If you follow our segmentation plan, you will knock it out of the park,” they told the Aaron’s team. The consultants shared a variety of marketing segments they had developed based on the analyzed customer transaction history. But looking at the segments, Zack Hamilton, Director of Customer Centric Initiatives & Experience, saw something missing.

“Have you ever thought about utilizing NPS (net promoter score) as a segment?” Hamilton asked. The NPS measures a customer’s willingness to recommend a product or company to others. The consultant brushed aside the question, but Hamilton pursued the NPS on his own.

The team used survey data to segment their customer database into three groups:

  • Promoters – The brand loyalists that love the company.
  • Passives – Those who didn’t have a “Wow!” experience. They don’t have a negative view, they’re pretty neutral.
  • Detractors – They had a bad experience – such as late delivery or bad setup – and would not recommend the company.

After determining they were spending an outsized amount of money marketing to the Detractors, Hamilton proposed focusing more energy on the Passives. “If we don’t reach these people, they could go to a competitor,” he observed. Hamilton found that the Passives wanted a personalized experience. “They expected us to know who they are and what they want.” They also wanted the right engagement channel. In previous efforts, they were flooded across digital, print and all of Aaron’s channels.

In pursuing the Passives, the team analyzed expressed product preferences, most responsive channels and what type of offers the customers used in their past purchases. They used this to send personalized offers, featuring products the customer had expressed interest in, on the channels they preferred.

Ultimately, by adjusting the spend and delivering personalized content, the team doubled the responses from Promoters and saw a 700% improvement in response rate from the Passives.

And the best part? This process saw a 17% reduction in marketing spend.

“The key was, we 100% customized the marketing to deliver relevant pieces to the right groups,” said Hamilton. He fully credits customer feedback for the company’s success. “If you listen to your customers, they will give you feedback. It may not always be good feedback, but if you listen you will learn from it.”

This week, hundreds of marketing analytics professionals are gathering in Atlanta for DMA’s 2018 Marketing Analytics Conference (MAC). Stay tuned to this blog or follow along on the hashtag #MAC2018 for more marketing and analytics expertise!