Points Update Mailing (PUM) has two key objectives. Firstly, it communicates personalised points statement information and relevant programme updates to collectors. Secondly, it enables Nectar Business sponsor brands to communicate directly with collectors with highly targeted bonus point offers, driving spend lift and frequency.
The main PUM direct mail is supported by a range of digital communications, including a digital version, chaser email and supporting web page. Data segmentation is managed for each sponsor, ensuring their objectives are achieved in the individual offer strategy. To ensure relevancy and drive offer response rates, a range of data segmentation models have been developed for the PUM.
In addition, data collected through Nectar Business transactions is used to create the highly personalised messages within the communication. The successful use of personalised data for messaging and transactional data to develop offers segmentation has driven the success of the campaign, resulting in a high average response rate of 12 per cent for the March 2010 PUM.
About the client company
Owned by Groupe Aeroplan, a Canadian publically listed company, Nectar Business was launched in 2005 as the first large-scale UK B2B loyalty programme. It allows small and medium-sized businesses to collect Nectar points on their business expenditures through a range of participating brands (sponsors).
Integrated agency The Crocodile has worked with Nectar Business for four years, helping the programme to use creative and effective marketing solutions to meet its business objectives.
Strategy: broader business challenges PUM successfully addresses a range of key Nectar Business challenges:
- Develop efficient data analysis models that allow high levels of segmentation among the collectors database, in order to deliver exclusive and relevant sponsors offers
- Build differentiation and relevance to achieve standout among other Help Nectar Business sponsors achieve their goals targeting valuable customers via efficient data segmentation
- Maximise revenue and ensure return on investment (ROI).
Objectives of the campaign
Incentivised collector’s engagement high highly targeted personalised offers: Creating specific transactional data models, the PUM delivers sponsors offers that are selected to be relevant to each individual incentivising engagement with the programme.
Communicate relevant messaging to collectors creating differentiation in the market: Highly targeted data segmentation allows the PUM to implement relevant messaging, generating differentiation within the loyalty programme market.
Support the business goals of sponsors: PUM applies specific data segmentation models for each of the sponsors, allowing them to communicate highly targeted offers to their high-value costumers through cost-effective media.
Maximise the revenue opportunity: The use of transactional data models leads to relevant offers that ensure higher response rates, driving revenue.
The target audience
The PUM targets Nectar Business collectors who have been active for more than six months and are highly engaged. Maintaining or uplifting these high levels of engagement through relevancy in messaging and offers is therefore the main challenge and objective for data analysis.
Messaging segmentation is based on:
- Points balance
- Life-stage
- Transactional behaviour
Sponsor offers segmentation is based on:
- Transactional behaviour
- Customer status with individual sponsors
- Messaging – data segmentation model
- Targeted offers data segmentation model
Using both Nectar Business data and product-level information from sponsors, hierarchical clustering data analysis has been developed to identify distinct groups of customers that show similarities across a number of different input variables.
This model allows the consideration of multiple input variables when creating groups, rather than a conventional two-dimensional approach. From analysis, a specific number of clearly defined clusters have been identified. These cluster profiles lead the development of individual strategies to implement in PUM bonus offers.
Media, channels or techniques used
Primary media: Direct mail
PUM is an A5 eight-page roll-fold self-mailer. Dynamic digital printing is used to allow extensive full-colour data-driven personalisation of artwork and targeted messaging and offers.
Picture Messaging – data segmentation applied to following areas:
– Outer: segmented by points balance
– Welcome letter: variable text segmented by:
- Points balance
- Programme life-stage
- Transactional behaviour
Statement page: personalised summary of collector’s current points balance and recent activity. Artwork is dynamically varied to show logos of the brands where collectors have transacted. Personalised messaging adds further relevancy based on:
- Collection with business/consumer sponsors or both
- If the collector has/has not redeemed recently
- Points balance
Targeted offers data segmentation applied to following
areas:
Bonus point offer coupons: The data segmentation model used in the March 2010
PUM provided the following coupon offers:
- 8 artwork-variable coupons per collector
- 10 participating sponsors providing offers
- 109 unique offers
- 18,321 collectors targeted
- 40,320 possible unique offer combinations
- 102,604 personalised offers sent
Secondary media: Ditigal
Offers email: sent to email-only contact collectors, or who have proved unresponsive to the paper PUM.
– Chaser email: sent as a reminder of the mailing and encouraging collectors to use offers before they expire.
Timescales of the campaign
PUM – March 2010:
Previous PUM research November 2009
Planning and scoping August 2009
Briefing September 2009
Artwork development October – November 2009
Proofing 6 January 12 February 2010
Production 15 24 February 2010
Direct mail deployment 1 March 2010
Chaser email deployment 31 March 2010
Research results April 2010
Analytics results May 2010
Budgets
Creative development £18,000
Production and print £19,000
Results
Collector satisfaction: Post-campaign research identified how satisfied collectors are with the PUM and Nectar Business.
- Open rate among those who recall receiving the March 2010 PUM is 95 per cent
- Collectors who are “extremely/very satisfied” with Nectar Business after receiving the March 2010 PUM is at 79 per cent, a rise of +16 per cent over the previous mailing.
Incremental spend: Sponsor companies experienced increased spend one sponsor reporting a significant incremental spend of over £290,000.
Response rate: Response to offers is tracked via bonus points issued by the sponsors. For the March 2010 PUM, the overall campaign response rate was high at 12 per cent.
Client testimonial
“The Nectar Business Points Update Mailing provides us with a valuable channel to send targeted and relevant offers to our customers via an extremely cost-effective channel, ensuring a successful response rate and ultimately ROI to Viking Direct.”
Julie Warner, Loyalty and Retention Manger, Viking Direct (a participating sponsor in the campaign)
