How one brand hit 215% ROI with ‘sophisticated’ segmentation
A multi-layered segmentation strategy helped garden centre chain Dobbies identify the ‘killer’ categories directly influencing customer behaviour.
On a mission to grow customer retention, improve NPS and achieve hyper-personalised communications, garden centre chain Dobbies decided the time was right to overhaul its segmentation strategy.
Working with the Go Inspire Group, the team wanted to find the optimum combination of products, offers and content for each Dobbies Club Plus member. Central to the plan was a multi-layered targeting model built on usage clusters, key category analysis and optimising discounts.
The marketers started by developing a bespoke segmentation strategy based on seasonality and consistency of spend. The team grouped customers together according to their purchase category mix, analysing the number of transactions made across five ‘super groups’ – garden, house and home, restaurant, leisure and food.
This work identified 14 ‘top level’ groups and 48 ‘sub-clusters’, each with a different spend pattern and associated promotional objective to up-sell or cross-sell. Further analysis determined which ‘killer’ categories, sub-categories and products directly influence a customer’s level of engagement. Each layer of segmentation was then used to optimise the target audience and discounts on offer.
Adopting a test and learn approach, Dobbies went from five versions of its ‘trade driver’ mailings to 53,584 permutations, achieved via a “dramatic increase” in the level of sophistication applied.
The segmentation push saw Dobbies drive a 199% rise in incremental revenue, 17% increase in customer visits and 10% growth in average customer value.
Not only did this work help the brand win the 2023 Marketing Week Award for Best Use of Segmentation, Dobbies notched up a 215% return on investment and 15% increase in customers scoring the company with an NPS of nine out of 10.
