For marketers who provide seasonal products, driving off-season sales is often challenging. However, by using predictive analytics, Billie Phillips, vice president of marketing at the Salem, Mass.-based candy company Harbor Sweets, was able to identify “at-risk” customers and market to them without risking valuable marketing budget dollars. Phillips used Portsmouth, N.H.-based Loyalty Builders’ Longbow analytics software to analyze customers with an order history that indicated they were buying less frequently, and then apply this insight to a targeted mail campaign. With a response rate of nearly 40 percent, Harbor Sweets was able to increase results from a market that, previously, the company was slowly losing touch with.
Target Marketing: How does predictive analytics allow you to find and reach out to at-risk customers?
Billie Phillips: We recently analyzed a number of customers that looked like they were at risk—they had not ordered for a while—but had a good loyalty scoring and had been interested customers when they ordered in the past. We determined how many of those names we wanted to contact, which allowed us to stay within a budget we could control. Then, we mailed a personal letter to them, and shortly after the mailing, we had a 9 percent response rate. The rate then grew, over time, to almost 40 percent.
In terms of the offer, the added benefit was that it made people remember Harbor Sweets. So the residual response grew, and the people who got that letter continued to order through the summer and fall. The interesting thing was [that] the special we offered them was good through Mother’s Day, and while the entire group did not take advantage of the initial offer, there was a response that continued into the summer and the fall.
TM: How did the new approach improve your ability to effectively allocate marketing dollars?