2012 Silver Best data strategy

Client Costa Coffee

How did the campaign make a difference? The task was to drive incremental value and loyalty from the Costa Coffee Club. Data-driven insight from customer interactions was 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 work analysed 7.5 million customers, over 300 million transactions and 7,000 product purchase combinations to create four segmentation models, two new dynamic email templates, a content management system designed by eCircle, and an enhanced feedback platform developed by Fizzback. This enabled sending and tracking more relevant, timely and rewarding communications. Being tasked with driving incremental behaviour and loyalty from our emails wasn't easy. But the strategy of personalisation allows continual tweaking and fine-tuning of methods.

How did creativity bring the strategy to life? The new dynamic email system put each customer into a segment of one. Now, every single customer gets emails with content relevant only to them, to what they buy, to how often they visit and even if they have a sweet tooth. The primary segmentation enabled customised offers; for example, if the average number of visits in the ‘very high’ group is seven per month, then the system could offer double points if the 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 or lapsed customers. Copy and creative was adapted to redemption status, for example communications around favourite products that customers could redeem for free.

Results This activity increased spend per customer by 50% - more than twice the target. Frequency of Coffee Club in-store visits increased by 47% (three times target) and ATV per customer increased by 6% (twice target). Point redemption rates increased by 84% – nine times higher than target. All of which 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