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Client: A chain of 600 retail jewelry outlets in the US that specializes in the mid-tier jewelry marketplace. They compete against companies like Helzberg's and Kay’s. The company sells through both catalogs and with stores. Most of the stores are located in shopping malls. |
Challenge: Sales of jewelry had plummeted and the company had slashed it's advertising budget. They needed to make their direct marketing efforts much more cost-effective. The goal was to increase both direct catalog sales as well as to boost store traffic.
Solution: Management Analytics Group started with cleaning the company's existing customer data files. Then we used our proprietary RFM/A methodology to define high-value and mid-value customers and recommended different offers and incentives for each segment as appropriate and attractive to the customers in each segment. Finally, Management Analytics Group uncovered 5 distinct market segments that would provide a high Return on Investment in increasing store traffic.
Result #1: Management Analytics Group cut mail waste by 5% overall, which meant a substantial savings in materials and postage -- which went straight to "the bottom line."
Result #2: Management Analytics Group increased the profit performance ("ROI") of promotional offers substantially after setting the price points correctly for each segment.
Result #3: As a bonus, Management Analytics Group discovered a core segment of “self purchaser” customers who were likely to generate significant business during the slower off-holiday months if they were approached with an appropriate offer to do so.
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