Analytics Innovation: Golfsmith
Digital marketing has been a game-changer that has caused many marketers to loosen their grip on more traditional channels, such as direct mail. Not Golfsmith. The specialty golf retailer used data and analytics to better segment its customers and drive more targeted, cost-effective campaigns.
Golfsmith started as a catalog retailer, so its marketers have always had an affinity for print. But as the company became more digital, the marketing team started to send larger batch-and-blast campaigns. Although these campaigns were still effective, Golfsmith's VP of Omnichannel Marketing Kim Lewis thought there was an opportunity to optimize its list targeting and content strategy.
That opportunity came in 2014 when marketing agency DMN3 proposed testing whether Golfsmith could generate the same lift in sales during the holiday season with a less expensive medium; specifically, a postcard versus a mini catalog. Golfsmith had never sent a postcard as part of its holiday mailings; however, the retailer gave it a go and randomly sent one of the two mailings to each of its customers.
After running the test, Golfsmith needed a way to analyze the holiday mailing pieces' performance. So in August 2015, it started using two solutions within Experian Marketing Services's suite to analyze the customer response rate to each mailing and, ultimately, use these insights to drive better targeting and ROI for the upcoming holiday season.
Instead of swinging into testing right away, Golfsmith decided to avoid any unnecessary bunkers and use the Experian Marketing Suite's Identity Manager to clean and complete its customer data, as well as boost its in-house list by obtaining mailing addresses for top customers. This step was especially important, Lewis notes, because Golfsmith hadn't consolidated its disparate data sources before.
“We never had a view into what happened online and what happened in-store combined,” she says. “They were always viewed separately and we had no idea how the customer purchase behavior overlapped.”
Once the data had been clean and organized, Golfsmith used Experian Marketing Suite's Intelligence Manager tool to analyze the results of the 2014 direct mail holiday test. According to Lewis, the analysis showed that the less expensive postcard outperformed the more expensive mini catalog among moderate spenders; however, there was a higher response rate among high-spending customers who received the catalog.
“Interestingly, we found that this type of direct mail format targeting is actually pretty rare and sometimes lost in the digital-focused media strategies of today,” she says. “So, while digital is also critically important to us, customers' email inboxes are overflowing and we found that getting the right direct mail piece in front of the right customer at the right time to be just the thing to cut through the clutter.”
Based on this insight, Golfsmith was able to further segment its customers and create a new strategy for the 2015 holiday season. The company sent postcards to a greater percentage of customers and, therefore, cut back on total costs. In fact, the company saved so much money that it was able to use the existing campaign budget to create an incremental pre–Black Friday direct mail piece encouraging customers to opt in to the retailers email program to receive offers during the holiday season and beyond. Early results show that 2015 campaign generated a double-digit increase in response rate over 2014—proving that analytics helped Golfsmith hit the green.