Personalising the customer’s experience Customer segmentation Communication strategy –...

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  • Personalising the

    © dunnhumby 2011 | confidential

    Personalising the customer’s experience

    Clive Humby Chairman, dunnhumby

  • 2

    © dunnhumby 2011 | confidential

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    Clive Humby and Edwina Dunn

    found dunnhumby 1989�2 2001

    dunnhumby / Tesco commercialise ClubCard insight

    �140 2003

    dunnhumbyUSA opens - Kroger

    �250 1995�30

    Tesco and dunnhumby launch ClubCard

    �700 2007

    dunnhumbyFrance opens - Casino

    �1500+ 2010

    © dunnhumby 2011 | confidential

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    £350m+ revenue from 150+ clients

    © dunnhumby 2011 | confidential

    24 countries and growing

    Europe, Asia, North America, South America

    1500+ employees and growing

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    dunnhumby’s “win win win” approach

    Retailer Value Creation

    Proposition: Grow Like for Like sales and Net Margin via better decisions throughout the business

    Model: Private service team for retailer

    Insights to Suppliers Media to suppliers

    © dunnhumby 2011 | confidential

    Proposition: Sell the unique customer data

    asset to suppliers through customer reporting

    and analysis service

    Model: Collaborative 50:50 profit sharing

    Proposition: Sell targeted communications

    (Statement and interest mailings etc) and in

    store media to suppliers

    Model: Collaborative 50:50 profit sharing

    More Relevant Customer Experience

    Customer experience is improved; channel, promotions, products, prices and communications

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    to help brands and organisations engage more completely and profitably with their customers

    by developing customer based action plans built on

    integrating “real-time” data

    © dunnhumby 2011 | confidential

    integrating “real-time” data insights, creativity and change capability

    so delivering increased brand value to our clients

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    Customer Data

    Customer Insight

    Customer Management

    Long Term Customer

    Loyaltyenables... to


    to grow...

    Customer segmentation Communication strategy

    – Retention

    Increased Customer

    Clubcard has enabled Tesco to know their customers

    © dunnhumby 2011 | confidential

    – Lifestage

    – Value & Loyalty

    – Lifestyles

    – Retention

    – Growth

    – Win-back / prospecting

    Business strategy

    – Price

    – Promotions

    – Ranging

    – Availability

    Customer Lifetime Value

    – Sales growth

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    What do we need to understand?

    Attitudes Drivers of Behaviour

    Behaviours Transactions Profit

    Focus on profit leads to little

    relevance, increasing issues of

    Focus on attitudes is difficult to convert

    into driving behaviour and profits

    © dunnhumby 2011 | confidential

    relevance, increasing issues of

    customer churn and dissatisfaction

    into driving behaviour and profits

    Understand what customers want

    Become more relevant

    Keep customers engaged for longer, engender trust,

    long term loyalty and drive value creation

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    more information

    more choices

    exercising choice gets quicker and easier

    Customers don’t get stolen … they walk

    © dunnhumby 2011 | confidential

    exercising choice gets quicker and easier

    if you want to protect and enhance your brand value

    your offer must be relevant and valued

    Customers are now data savvy, they see clearly where you

    fail to make the engagement relevant

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    How do we achieve Relevance?

    ● What are the key attributes of the products you choose?

    ● What are your favourite purchase channels?

    ● When you buy

    © dunnhumby 2011 | confidential

    ● Promotional Behaviour

    ● Clubcard Offers

    ● Clubs

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    Segmentation allows us to build this picture for millions of customers

    Lifestage Application form, what they buy


    Habits Share of shopping, Recency & frequency

    Lifestyles Motivations behind shopping behaviour

    “You are what you eat”

    Primary Channel Preferred format (Supermarket, Express, On-line, Petrol)

    Brand Advocacy Participation in extensions (, TPF, Baby Club, Wine club)

    Promotional Promiscuity Cherry picking deals, bulk buying to larder fill

    Profitability Brand choice, packaging preference, weight of purchase

    © dunnhumby 2011 | confidential

    eat” Baby Club, Wine club)

    This is how our customers behave.

    Attitudes Drivers of

    Behaviour Behaviours Transactions Profit

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    Pareto is almost right in Grocery



    % active customers



    8% 34%

    14% 31% loyal

    © dunnhumby 2011 | confidential



    25% 22%

    43% 11%

    Lapsing 10% 2%



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    this is a friend we know…

    – she is a busy young lady

    – she looks after her health and loves fresh produce

    – she drives to the supermarket on a Saturday morning

    – she reads Hello Magazine

    © dunnhumby 2011 | confidential

    we know 176m people around the Globe as well as we know Miss Jones

    – she reads Hello Magazine

    – she has a cat

    – she doesn’t pay attention to the price of products

    – she does look out for promotions

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    lifestyles are built from “DNA profiles”

    Miss Jones’s DNA Profile: a “time-poor, food-rich” customer

    – 25,000 products are used to create a customer’s DNA

    – we have a DNA profile for every single customer

    © dunnhumby 2011 | confidential




    Ad ve

    nt ur

    ou s

    Bi g

    Bo x

    B ra

    nd ed

    Ca lo

    rie C

    ou nt

    er s

    Ca lo

    rie L

    oa de


    Co nv

    en ei

    nc e

    Fi ne

    st Fo

    re ig

    n Fr

    es h

    Gr ee

    n H

    ea lth

    y H

    ig h

    Pr ic


    Ki ds

    Lo ng

    L ife

    Lo os

    e Lo

    w Pr

    ic e

    Lu nc

    h Bo

    x M

    ea t

    Pr e

    Pa ck


    Co ok

    in g

    fro m

    S cr

    at ch

    Sm al

    l B ox

    Te sc

    o' s

    O wn

    Tr ad

    iti on

    al Va

    lu e

    Ve ge

    ta ria


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    We will talk to customers in different ways…

    loyal opportunity newlapsed

    quarterly statement

    coupon at the till

    © dunnhumby 2011 | confidential

    local store mailings


    thank you

    trade driver home mover


    win back




    Promotional Flyers

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    Key levers for the retailer and CPG?

    ● Right mix of good prices & great promotions

    ● Right range of products on the shelf

    ● Successful New Product Developments

    © dunnhumby 2011 | confidential

    ● Successful New Product Developments

    ● Good service in the store

    ● Relevant personal offers and rewards

    ● Reacting to changing customer needs

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    What a bargain, I’ll

    sssss ss ss ssss


    Now what’s ss

    sssssss sssss

    ssss sssss

    Gsssss sssss sss


    sssssssss ssssss

    Promotions have different impacts on customers

    © dunnhumby 2011 | confidential

    Pssssss I ssss sss


    sss sss ss I ssssss


    Psssssssss Wsss


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    Promotions – what is the right mix & discount?







    Cherry Pickers


    © dunnhumby 2011 | confidential







    Full Price Upto 30% 30% to 40% 40%+




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    � improved reach

    � improved balance

    More effective flyer promotions

    Reward Anchor • Broad Appeal • Large Associated Sales • Medium Baskets

    Incentive Anchor • Middle Appeal

    © dunnhumby 2011 | confidential

    � improved balance

    � improved return

    • Middle Appeal • Large Associated Sales • Medium Baskets

    Low End Helper • Low End Appeal • Small Associated Sales • Medium Baskets

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    Optimised merchandising in cleaning products

    © dunnhumby 2011 | confidential

    increased facings of low end products at price sensitive stores

    Sales increase +16% Units increase +48%

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    Retailers today… relevant communications