Intelligent loyalization in large distribution

The retail sector is going through a strategic change in Marketing and Client Management. El Árbol Group and the children’s fashion company Neck & Neck are two innovative examples of how to The number one channel of a big distribution company and another of a medium-sized supermarket company develop intelligent and profitable Loyalization Strategies.

The Árbol Group 'exploits' its points program

Company: El Árbol Group
Objectives: maximizing Marketing Strategy efficiency.
Solution: transforming the loyalty card into an instrument for exhaustive client knowledge.
Result: savings and increase in sales and Marketing action efficiency.

A stable group of shareholders and an accurate business strategy have reinforced El Arbol Group’s reputation as one of the distribution companies with greatest potential in our country. A leader in Asturias, Castilla and León, and Extremadura, the company, which has close to 390 supermarkets and 40 cash & carry, has traditionally based its marketing strategy on large investments in communications – essentially, radio advertising and massive brochure mailings – and its points program. This card is proof of how a mere points exchange tool for discounts can become an invaluable source of information concerning consumer habits and client needs. El Arbol Group has an important competitive advantage: their card is in 800,000 homes, of which an average of 700,000 clients use it annually. Having a high number of cardholders is not the same as having a high number of active users. This advantage has allowed the company to have a current database, which it takes advantage of with the help of Daemon Quest
using analytical techniques, and which has allowed the establishment of four different client segments, categorized by specific parameters, to which the company applies different sales and marketing strategies. Detecting new growth niches and optimizing costs between 20 and 30% have been the first results the company obtained, capable of knowing their client’s profiles more accurately, adapting their campaigns and offers to the different need segments, rigorously measuring the effectiveness of their campaigns and calculating with certainty the ROI of their sales and marketing actions. El Arbol Group has been able to transform a loyalization card into an advanced instrument for analyzing the client’s behavior. The resulting savings and increased performance of marketing actions are contributing to the consolidation of the client card as the company’s sales strategy engine.

Neck & Neck makes their Client Club profitable

Company: Neck & Neck.
Objectives: increase client club membership, purchase frequency, and average purchase price.
Solution: Advanced Marketing in Club Neck’s Client segmentation.
Result: effective sales.

Neck & Neck is a young and dynamic company that in the past few years has registered a strong accumulated growth, as much in revenues as in expansion (more than 80% in both cases). These numbers have consolidated it as the largest chain of children’s fashion in Spain, with international presence in Europe and countries as diverse as Saudi Arabia, Mexico, or the Dominican Republic. A large part of Neck & Neck’s success is due to its client club, which gives them vital information not only about the their consumer’s socio-demographic profiles (“client dimension”), but also about the state of their relationship with the company (“state dimension”). Close to one third of revenues comes from Club Neck sales, which has more than 62,000 members, whose spending is far superior to that of non-member clients, at a rate of more than 80%. Knowing the client in-depth, developing plans according to each client segment’s needs, and systematizing sales and marketing actions is the triple challenge Neck & Neck has set for itself in order to raise its club membership, increase frequency of purchase and, at the same time, increase the average purchase price. Crossing the their consumer segment (“client dimension”) with their current state (“state dimension”), Neck & Neck is applying more accurate actions. Two examples: for the “mother and baby” client profile, a new client but not active, the company sets its obtainment goal, applying an higher contact frequency, a high promotional level, and mailing as their channel. In the “mother and daughters” segment, in an active state, the strategy pursues loyalization, with much more moderate contact frequency, a medium promotional level, and the use of a direct channel. This strategy is allowing Neck & Neck to directly contribute to the company’s increase in revenues, and therefore to meeting their ambitious growth plans for the coming years.