ROI Case Study Using Data | DMN3

Improve Marketing ROI Using a Data-Driven Strategy

A Texas-based retailer owned by Berkshire Hathaway, wanted to drive repeat purchases from customers who purchased a mattress 8 years ago. They also wanted to achieve a 6-to-1 marketing ROI on these new mattress transactions.

Star Results

Challenge

Although mattresses have a recommended lifespan of 8-10 years, most consumers do not purchase a new one until well past that timeframe. Buying a quality mattress is also a big consumer purchase. The large investment contributes to why consumers put off the purchase of a replacement. According to the International Sleep Products Association (ISPA), a large segment of buyers wait until 13 years — when they see visible signs of wear or when the sagging mattress starts to impact their sleep. Furniture Today reports that 85% of consumers research mattresses online before purchasing.

The online research is often prompted by a fear of buying the wrong mattress. However, in spite of the online research, less than 5% of sales are made online. Consumers want to “touch and feel” the mattresses before purchasing. Most importantly, the average consumer only visits one store before buying. So to make a mattress sale, you must get the prospective buyer in your store.

Data Driven Approach

Based on our direct marketing experience, we know that it is 5 times easier to sell to an existing customer compared to a prospect.  So, we decided to target past mattress buyers using a simple reminder email campaign.

We developed a simple, cost-effective email campaign by leveraging transactional data to target our existing customers with mattress purchases made 8 years ago in 2006. By using customer data, we had a greater chance of meeting our goal due to the fact that those who are already familiar with our brand and made a previous purchase are more likely to make another purchase than a new prospect.

data-driven-approach

Campaign Execution:

Step 1:

Pull data from 2006 mattress transactions and match against the current customer email database.

Step 2:

Determine optimal workflow and timing of emails to correspond with the mattress promotion. To simplify the campaign, we decided to send an initial educational reminder email followed by a second reminder email 6 weeks later (only to customers that didn’t open the first email).

Step 3:

Develop a personal email leveraging past buying data:

  • Create an email template with a “non-promotional feel”.
  • Use customers’ actual mattress purchase dates to remind them when they purchased.
  • Include purchase information in the subject line to make sure that emails were opened.
  • Build awareness of the need to replace their mattress every eight years.
  • Invite customers to come in to the store using an in-store promotion – A no obligation ‘Test Rest’ with a free gift such as a travel pillow.

Step 4:

Set up a four-month timeframe to pull mattress transactional data to evaluate the success of the promotion.

 

 

 

 Results

The fourth-month long campaign succeeded in driving sales and revenue.

  • 35 incremental mattress sales
  • Generated over $52,000 in sales
  • Achieved a 26-to-1 marketing ROI
  • Exceeded revenue projections by 430%