Marks and Spencer Case Study from

Case Study: Marks and Spencer

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Marks and Spencer

M&S selected Incentivated to develop, implement, and monitor its first mobile CRM campaign.

The key aim of the campaign was to increase M&S’s mobile database to facilitate communications with its customers who had signed up for mobile alerts, deals, promotions. The mobile CRM strategy aims to generate increased in-store footfall and sales revenue, while building brand loyalty. This was an innovative campaign currently growing M&S’s mobile database to over 800,000 subscribers, triggering an increase in purchase and a weekly positive ROI for M&S. The campaign has also shown to be successful in terms of awareness, with almost 100% of contacts recalling receiving SMS and MMS messages. This new communications channel is robustly measurable and provides information for M&S’s loyalty team.

M&S selected Incentivated to develop, implement, and monitor its first mobile CRM campaign. The key aim of the campaign was to increase M&S’s mobile database to facilitate communications with its customers who had signed up for mobile alerts, deals, promotions. The mobile CRM strategy aims to generate increased in-store footfall and sales revenue, while building brand loyalty. This was an innovative campaign currently growing M&S’s mobile database to over 800,000 subscribers, triggering an increase in purchase and a weekly positive ROI for M&S. The campaign has also shown to be successful in terms of awareness, with almost 100% of contacts recalling receiving SMS and MMS messages. This new communications channel is robustly measurable and provides information for M&S’s loyalty team.

Brief

In spring 2009, Marks and Spencers briefed mobile agency Incentivated to create an opted-in CRM database that M&S could target with offers direct to customers' phones.
There were seven key objectives:

• To create and execute a CRM campaign to grow M&S’s mobile database size from nothing (Spring 2009) to a large six figure number (Spring 2010) (acquisition).
• To create a mobile channel for the M&S loyalty team to add into its marketing mix as it was previously using DM and e-marketing only.
• To generate sales revenue via text alerts and reminders
• To monitor the success of the scheme through statistical tracking of incremental sales
• To build on brand loyalty activity with m-voucher roll-out (retention) and text invites to special sales events.
• To increase footfall into certain stores via text event reminders (sales generation)
• To minimise irrelevant messages keeping opt-out levels low

Strategy

This campaign was M&S’s first venture into mobile CRM. The overall aim was to increase the size of its mobile database and communicate with its customers in a more relevant and timely way thus driving customers into store and hence sales revenue.

The campaign reached out principally to loyalty programme customers and non-loyalty customers who had signed up for text alerts, with offers, deals, promotions and news about M&S. This meant that M&S could engage with customers through the mobile channel directly and use this new method to compliment existing DM and email contact strategies.
Adhering to M&S’s stringent and high quality brand values while minimising opt-outs, unwanted messaging and complaints from customers was paramount while implementing the campaign, as was implementing robust and complete tracking of all aspects of the messaging service. Different forms of messaging could be tested on segmented audiences against a control group such as MMS v SMS before rolling out to the larger groups on the database.

In order to implement the mobile CRM campaign Incentivated focused on the following elements directly relating to the objectives:

• Growth of M&S CRM database from nothing to several hundred thousand in one year.
• To send out a message every other week to customers driving footfall in-store and therefore revenue growth.
• To retain customers through segmentation and monitoring opt outs.
• To tailor messages to different segments of M&S’s customer base and send them messages relevant to their shopping habits.
• To show how trackable mobile CRM is with robust statistical results leading to incremental sales, ROI and profit.

Execution

Growing the M&S mobile database:

- Across existing channels exploiting: press, in store, direct mail, email, magazine, and online through both the M&S site and banner advertising on other sites.
- Text to win competitions – including Vogue VIP Night Out, M&S VIP Photoshoot, and 10x 10,000 M&S Points.
- Event Reminders all for in-store loyalty events.
- To increase awareness of the availability of text reminders to customers through general exposure of the text call to action.
- Educating M&S staff about the benefits of a text service via the staff magazine and the store manager’s training manual.

Sending timely and relevant messages to the receptive customers to generate sales:

- Testing of different message types and their effectiveness so that optimum frequency is achieved:

o Message types: sale messages, food offers, ‘Dine In’ notifications, wine offers, homeware sales, flower offers, gift cards, points offers (including vouchers).
o Monitoring customer feedback through opt out rate and customer services. This is delivered by making it clear that the customer can opt out at anytime and giving them this option at the end of every text message sent.
o Segmentation of different types of messages to different customers based on their preferences (discerned from their spending habits on the loyalty card or preferences expressed through an online form when signing up to text alerts).
o Monitoring sales through the development of M&S pre-existing statistics to embody SMS.
o Keeping opt-out rate down and limiting the number of messages sent.

Strict measures on text broadcasting volumes and successful segmentation:

Text messaging broadcasts are personal so a careful balance must be maintained to retain a strong messaging volume and to keep opt-outs low. M&S followed a strategy of only contacting its newly acquired customers within time limits. This was usually no more than six texts in any three month period which works out at only one message sent per customer per week with occasional rest weeks. It also used targeted offers as it carefully segmented the database with offers appealing to those who shopped in certain departments - mobile CRM allowed M&S to track shopping habits and react /change its messaging tactics accordingly.

Mobile CRM also allowed testing to be conducted within a control group which contributed to high retention levels as they forecast results based on clear indications of what an opt-out rate would be; before sending to the rest of the database.

Results

This was a highly effective messaging campaign which:
• Significantly grew M&S’s customer base to over 800,000 as of June 2011
• Created a robust new measurable channel for the loyalty team to add into its marketing plan
• Most importantly, it has been shown to trigger an increase in purchases, as measured by basket spend, for those receiving the messages as opposed to those who do not.

Data Capture

The target objective for database growth was exceeded by a substantial margin. The target was exceeded several times over.

Net growth (acquisition less loss) was strong because a low opt-out rate (per blast) was achieved by carefully planning timely and relevant messaging. The base was segmented and different messages sent to different groups, with many people not receiving a message in any one week if it was felt to be not applicable to them. Segmentation is determined according to:
• preferences given at sign-up
• socio-demographic information known about the customer
• behavioural information observed e.g. handset type and whether they have used the mobile internet
• sign-up route e.g. the promotion type which triggered the acquisition, if the customer joined through SMS (e.g. direct response date capture and text & win etc).

Return on Investment

Sales revenue was generated by the tactical activity such as the text alerts, competitions and reminders described above increasing footfall into stores. By tracking spend to individuals and then back to the SMS programme it has been shown week in and week out that the return on investment is positive. This was observed almost immediately and the programme has continued each month because of this.

This calculation is conservative as it ignores the impact on customers outside of the loyalty programme, even though they receive the messages as well. It includes only immediate spend and not any impact on the following week.

M&S’s overall market share of the retail sector’s SMS adverts sent and received each month has increased showing continue database growth:
• in the food sector it has increased by 14% since August 09*.
• in the clothing sector has increased by 28% since August 09*.

Finally, our CRM database work with M&S allowed us to conduct research on its first MMS campaign, aimed at identifying how consumers respond to different types of mobile messaging as part of the IAB/DMA mobile messaging research (see: http://www.mobilemarketingmagazine.co.uk/content/getting-messaging-message). The results show that in terms of awareness and recall, mobile messaging amongst opt-in consumers is a success with almost 100% of contacts recalling receiving the SMS and MMS messages with favourability towards the sophisticated format of MMS. The results showed a significant uplift in purchase intent resulting from SMS and MMS. The findings have benefited the whole mobile communications sector and will influence the next update of the industry best practice produced by these two bodies.

*Survey data from ComScore July 2010

'We wanted to reach all of our customers, regardless of their phone's operating system or device,' explains Sienne Veit, business development manager, new technologies, at M&S Direct. 'The mobile web is the perfect tool to do this. We also send text messages to more than 800,000 opted-in customers, and can now embed shortened links to specific web pages in these - launching a mobile web page direct from an SMS is a seamless journey.'

Sienne Veit, quoted in Marketing magazine, Feb 11