Data driven marketing brings benefits to a Ukrainian retailer during the war
NeuCurrent and its AI driven customer retention platform enables a leading Ukrainian retailer to increase YoY revenue using data driven customer segmentation and product personalisation under conditions of the ongoing war.
Hello! We are NeuCurrent, an omni-channel customer retention platform for mid-sized B2C companies. Our objective is to help retailers to better convert and retain their customers. We would like to share with you our successful use case of working with The House of Toys, our client of more than 3 years.
The House of Toys is the largest toys retailer in Ukraine with 60 stores around the country and more than 500k monthly e-commerce visitors. The shops have a wide range of toys for any age and taste. All toys are safe, authentic and certified as The House of Toys only works with official manufacturers and suppliers.
When we started our collaboration with The House of Toys there were several players engaged in the project - a marketing department of The House of Toys, NeuCurrent, and an external marketing agency. NeuCurrent was responsible for customer data management, the marketing agency created customer communications and sent 2 promo communications per week, while The House of Toys managed the entire process and controlled the key performance metrics.
During the first 3 quarters of 2021, revenue from direct communication channels started falling by 20%-30% YoY on average. The House of Toys realised the emerging problem and decided to bring NeuCurrent to cover the entire process of customer communications.
What NeuCurrent did
Step 1. NeuCurrent collected all customer data in a single place.
The House of Toys used 3 systems to collect and manage the data:
1. ERP for data on offline purchases 2. A website database for information on purchases at the internet shop 3. CRM for the loyalty program As it is much harder to work with fragmented data which generates much less useful information, our first step was to collect all accessible customer data in one database.
Step 2. NeuCurrent audited and cleansed customer data
The most valuable information for The House of Toys is the age and gender of the children of the prospective customers as this information allows recommendation of the most relevant products to customers.
We analysed the past purchases and found out that customers often purchase toys for the gender and age of the children which are different to what they had declared in their loyalty application form. Therefore, we suggested defining customer preferences based on their purchase history and doing it with the help of a special algorithm.
Step 3. Customer segmentation
Using the gender and age based on the purchase history and detailed product classification from the website, we were able to segment customers into 20 segments. In turn, that allowed us to use the algorithm that automatically chose preferred products for each segment.
Step 4. New types of communications
Prior to working with NeuCurrent The House of Toys had not performed any segmentation of their customers. The same communications were sent to all customers. This approach was flawed as for the vast majority of the customers these communications were irrelevant. NeuCurrent launched separate communications for each of the 20 segments. Each communication was created based on the customer data that we had collected.
Thus, in October 2021:
1. We changed the way existing promo communications were done (2 per week; channels: email, mobile). All of these communications became personalised for each of the 20 customer segments. Currently, we create a promo calendar for 6 weeks ahead so that each segment receives regular relevant communications. 2. We added a weekly communication with best personalised discounts for each segment based on previous purchases (channel: email).
Just these changes allowed The House of Toys to reverse a negative trend in revenues and instead have 20%-30% YoY revenue growth from direct communications.
We had big plans to follow up with. As the next step we planned to add 2 other types of communications:
1. Cross sell communications based on the previous purchases (channels: email, mobile). 2. Given the fact that The House of Toys’ unique proposition at the Ukrainian market is to offer high quality branded toys, we decided to create separate communications with the most relevant brands. The brand communications included personalised product hits and new additions for each customer segment (channel: email).
Our plan was to launch the new communications at the end of February 2022, however as with so many things for many people the Russian invasion in Ukraine got in the way of our plans. Right after the invasion The House of Toys halted all customer communication until May 2022.
In May, after the Russian assault on Kyiv was repelled, the business in Ukraine started coming back. We reintroduced all communications, measured ROI and saw some interesting results.
For example, we had to terminate some mobile communications as they became quite expensive and ineffective. But regardless, the trend of revenue growth by 20%-30% YoY continued even during the war!
Communications for customer retention that are based on big data and use relevant product recommendations come to be much more effective than standard communications.
Benefits
1. Revenue growth. 2. Cost savings due to automation of customer segmentation and communications. 3. Better customer experience as the customers only receive relevant product communications.
Anna Yeshchenko, CMO House of Toys says: “NeuCurrent has brought to us what we have been missing, a state of the art customer engagement platform and expertise in data driven marketing. They were able to reverse a negative trend in revenue from our direct customer engagements. The results speak for themselves!”
