2012 Silver Best use of eCRM

Client Costa Coffee

How did the campaign make a difference? The task was to drive incremental value and loyalty from the Costa Coffee Club. Customer interactions online, across Facebook, through SMS and via email were used to dictate dynamically tailored Coffee Club communications. This drove an ROI of 29:1 (up from 5:1) and generated an incremental £21m for the business.

What details of the strategy make this a winning entry? Coffee purchase is high frequency and low engagement, yet customers seek a light touch direct brand relationship. Completely personalised communications can increase customer loyalty and drive incremental behaviour. This activity analysed customer behaviour from stores, Facebook (through Paratus and Zenith), SMS feedback (through Fizzback), mobile web tracking and email response to create fivesegmentation models, two new dynamic email templates, a content management system (designed by eCircle), and an enhanced feedback platform (developed by Fizzback). This allowed the system to send and track more relevant, timely and rewarding comms. Being tasked with driving incremental behaviour and loyalty from these emails wasn’t easy. But the strategy of personalisation allows continual tweaking and fine-tuning of methods.We created five overarching segments from Very Low to Very High depending on spend and frequency. Within each of these segments we then created four sub-segments: New, Active, Lapsing and Lapsed, based on their life-cycle.

How did creativity bring the strategy to life? Email was the primary channel, for volume and cost-effectiveness, response tracking and dialogue possibilities. Facebook content mirrored this; feedback was possible via SMS, Facebook and email. The primary segmentation enabled customised offers, e.g. if the average number of visits in the very high group is seven per month, the system could offer double points if customer made eight visits that month. Copy was tailored using sub-segmentation and engagement score models, for instance explaining the scheme benefits to new customers or including re-engagement content for lapsing and lapsed customers. The copy and creative were adapted to redemption status, communications around favourite products that customers could redeem for free, for instance.

Results This activity increased spend per customer by 50%, over double the target. Frequency of Coffee Club in-store visits increased by 47% (three times target) and ATV per customer increased by 6% (double the target). Point redemption rates increased by 84%: nine times target. All of this led to an incremental £21m revenue for Costa! Loyalty was measured via segmentation retention – this increased from 60% to 80%, with upwards movement increased by 10% and lapsing reduced by 40% – as well as Net Promoter Scores, which increased from 42 to 51.

Team Tom Phillips, Andy Rowe, Amanda Griffiths, Katie Thompson, Juliette Harris, Joel Schilling ,Olga Skouteli, Khizar Raja

Other contributors Aszent – Database build and management, Givex – POS and registration platform, eCircle – Email broadcaster (also dynamic email and CMS development), Paratus – PR strategy and implementation, Zenith – Media planning and buying