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Traditional segmentations – like genre – fail to understand the whole customer opportunity

Business Issue:

HMV’s on-line business and loyalty scheme had successfully built up a sizable database of registered customers looking for a more involved relationship with the brand. With such a vast portfolio of products spanning five separate entertainment categories, the insights remained buried deep in the transactional data.

Brief:

Explore the depth of opportunity within the data using the customer lens with the specific purpose of engaging the wider business to drive sales growth through all channels

Our thinking:

  • Understand how customers are shopping with HMV and what their specific needs are
  • Understand a customer’s capacity to shop with HMV to channel resource appropriately
  • Realign the clustering of products purchased based upon customer lifetime baskets and not industry driven genres
  • Use the product groupings to predict interest in new titles

Our approach:

  • The first stage was to format a robust structure for the database, linking data from disparate sources all at the single customer level.
  • To cut through such a large flat base we used a combination of complex statistical manipulation and good old human intervention.
  • We created two distinct axes relevant only to HMV and the emotional relationship the customer has with the brand and the product.
  • The output of this deep analysis powered a personal and relevant eCRM programme

Our output:

  • Fully segmented database to drive all direct communications with customers
  • An understanding of potential value for growth and development
  • Strategic support to develop these segmentations into contact strategies
  • On-going analysis exploring the customer behaviour, to provide value-driving customer insight for tactical campaigns and solutions
  • Designed, generated and delivered the emails (on average 10 per week)

Business Impact:

Changes in basic approach to targeting of communications showed up to 50% increase in engagement and 10 times increase in purchase rate

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