Modeled New Movers

A National Retailer Uses Predictive Tools to Optimize Direct Marketing Programs

 

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The Problem

A national retailer had been managing a weekly new mover member acquisition program on behalf of its retail stores around the country, in order to increase enrollment activity into its loyalty program. On a month-to-month basis, the retailer’s marketing budget varied. As a result, during financially constrained months, the retailer was unable to maintain targeted levels of new member enrollment due to the lower volumes of direct mail.

The retailer needed a solution that would enable it to more effectively manage its new mover acquisition program during financially constrained months, and to achieve more consistent overall levels of membership enrollment activity into its loyalty program.

 

Models Target Highly Responsive New Movers

 

The Solution

Speedeon Data recommended that the retailer implement a Modeled New Mover program, which would enable the retailer to both categorize the rank and the performance of new mover member prospects into performance “deciles” and to identify key predictive demographic and geospatial attributes driving underlying response.

The Modeled New Mover program combines Multivariate Regression Analysis and Speedeon’s New Mover Data using ZIP+4™ Data Models – effectively leveraging the concept of the “homogeneous neighborhood”. The result is a highly predictive marketing tool through which offers can be tested, measured, and modified – driving continuous improvement in your marketing programs.

 

Favorable Topline and Bottom Line Results

 

The Results

The Modeled New Mover Program immediately uncovered key, actionable insights which the retailer used to fine-tune its mail selects. Specifically, the model prescribed:

  • Increasing the number of new member prospects: with home values between $234,000 and $395,000, and having between 5 and 7 trade accounts (i.e., credit cards) with a balance greater than 0.
  • Decreasing the number of new member prospects: with home values of $120,000 or less, and having an average number of trade accounts opened in the last 12 months of 0.50 or more.

 

By mailing to the top 6 prospect deciles, the program attained a 26% increase in relative redemption rate with 47% fewer records mailed – generating annual savings of $550,000. At the same time, the retailer was better able to maintain targeted levels of new member enrollment activity into its loyalty program.