Flash Retail & Daily Deals Retailer Shifts from Mass Marketing to Focus on Individualised Customer Retention Programmes
26 May 2016 – Achieving long-term, profitable growth in the flash retail and discount market will prove difficult if players continue to focus on customer acquisition, according to an interview with Sucharita Mulpuru, VP and Principal Analyst at Forrester Research, in a Retail Touchpoints article  . While the business model can be highly profitable, Mulpuru believes that in order to
reach revenue potential companies must shift from investing solely in short-term conversion programmes and find new ways to grow.
Exclusive deal providers face barriers such as high rates of disengagement, low purchase frequency and high customer churn. Email marketing is the primary driver of revenue from existing customers in this market, yet there are multiple opportunities for marketers to improve the effectiveness of email — and other digital channels — to increase repeat purchase rates, customer lifetime and customer lifetime value.
First and foremost, flash retail and discount organisations must move away from batch-and-blast marketing and adopt modern approaches to email, web and mobile that leverage customer data to serve personalised experiences.
UK online deal & offers provider Discount Vouchers is the first UK-based flash retailer and daily deals brand to invest in Sailthru’s Customer Retention Cloud SM . In doing so, the company gives itself significant competitive advantage by adopting a long-term approach to customer marketing and programme measurement by:
- Gaining a single view of their two million shopper database to understand individual behaviours and interests based on email and website data, in addition to preference centre data;
- Introducing personalised email newsletters and optimising email marketing performance through welcome streams and re-engagement campaigns;
- Localising deals based on customer geography;
- Personalising send time of email marketing campaigns based on individual level response data;
- Establishing the lifetime value of each shopper ensuring ROI on acquisition on a channel-by-channel basis;
- Measuring the downstream impact of marketing programmes through cohort analysis to increase the value of retained customers.
Kathryn Wright, Managing Director at Discount Vouchers, commented,
“Working with Sailthru has given us a clear view of our shoppers, what they like and dislike, so we can provide high-quality service and offers to every individual to continue to achieve meaningful, profitable growth. We have more than two million shoppers on our database, and with Sailthru we’re able to automate marketing activity based on customer behaviours and find new ways to re-engage lapsed buyers. It’s the powerful combination of segmentation, one-to-one personalisation and long-term measurement that makes Sailthru unique and why they are the partner we continue to choose when it comes to increasing value from retained customers.”
Success & ROI
Since working with Sailthru in 2012, Discount Vouchers has seen a significant uplift in increased customer engagement and activity both onsite and via email – including:
- 28% increase in purchases
- 22% increase in Revenue Per Thousand (RPM) from dynamically personalised email newsletters
- 19% YOY increase in Revenue Per Thousand (RPM) on targeted solus emails
- 10% decrease in email opt-outs
In addition to measuring purchases and opt-out rates, measuring RPM is a particularly effective way to view and measure success for retention focused marketers as it normalises revenue growth against the growth of email lists.
Neil Lustig, CEO, Sailthru, adds, “Discount Vouchers places a high value on customer retention and their shift from acquisition and short-term conversion focus is a sign that leaders in this market are maturing their approach to both customer engagement and profitability. Ecommerce is — more and more — a low margin model, making it mission critical that all retailers protect investments made in acquisition by strengthening their approach to retention. Never before have brands had the ability to retain individual customers at scale, but today we offer brands the ability to transform customer data into insights that automate relevant communications. I look forward to seeing Discount Vouchers continue to grow as a leader in this space.”
Based on success achieved to date, Discount Vouchers is exploring additional avenues for implementing personalisation to further increase the volume of retained customers and customer lifetime value. Sailthru’s solution offers the ability for Discount Vouchers and other retailers to personalise website and mobile app experiences based on comprehensive customer profiles. By extending personalisation to their website, Discount Vouchers will have the ability to create a connected, contiguous experience for every individual customer so that product recommendations and offers made in email are also featured online. Additionally, Sailthru’s Prediction Manager enables retailers to pinpoint the next action every individual customer will take relating to email response, website engagement, purchasing, email opt-out and other behaviours.
About DiscountVouchers.co.uk – http://www.discountvouchers.co.uk
Discount Vouchers was launched in December 2008, with an aim to bring shoppers the best and most exclusive discount codes and vouchers available. The company works with Affiliate Network Partners and some of the most famous UK and International online brands to offer visitors thousands of carefully selected deals each day to save money across a range of product categories, from Clothing & Accessories to Homes and Garden.
 Paraphrased from “Flash Sales And Daily Deals: A Passing Fad?”, March 2014, RetailTouchpoints.com article ( http://www.retailtouchpoints.com/features/industry-insights/flash-sales-and-daily-deals-a-passing-fad )