A direct mail campaign launched last fall by The Limited/Intimate Brands, Columbus, OH, for its Victoria's Secret fragrance line called Dream Angels has brought a return on investment as high as 400 percent, the company said.
The goal of the campaign, which was based on the company's inhouse database, was to prompt customers to visit different channels “and also introduce a new product to current, loyal lingerie customers who had not yet sampled a beauty product,” said Bill Lepler, vice president of CRM at The Limited Inc.
“Our analysis has found that customers buying Victoria's Secret products through all three channels — retail stores, the Web and catalogs — spend three to five times more than customers who buy through only one channel,” he said.
As a result, Lepler said, the company began looking at its database to see whether it could encourage catalog or Web users to visit local retail stores and buy the new fragrance.
To do this, it worked with SAS Institute, Cary, NC, an analytical CRM and data warehousing vendor, to segment its Victoria's Secret multichannel database to determine optimal targets for marketing campaigns and help influence channel behavior.
The database has 21 million customer names, but after analysis of existing customers, The Limited selected about 125,000 highly loyal lingerie customers to be tested in the cross-channel experiment for Dream Angels.
The Limited chose female customers based on spending patterns. Some were store-only customers, some were Web-only and some were catalog-only. The Limited segmented these customers into five cells, each with the goal of introducing a customer to a new channel. One cell included catalog shoppers whom The Limited wanted to direct to the Web, while another included Web shoppers whom The Limited wanted to direct to the catalog. Each cell contained 25,000 customers.
Each received a similar mail piece but with a different message. For example, if the customer was a store shopper, she was invited to visit the Web site or order a catalog. If she was a catalog shopper, she was invited to visit a nearby Victoria's Secret retail store to sample the fragrance.
The direct mail piece included a scent strip, along with graphics that matched the Dream Angels' imagery.
“There was no disconnect with the mail piece and with what the customers saw when they entered the store,” Lepler said.
Though Lepler did not give a specific response rate, he said that the mailing had tremendous success in moving previous catalog-only clients to the retail store. These catalog-only shoppers also were selected based on having retail shops near them. This part of the campaign earned a 400 percent ROI, Lepler said.
“We think one of the reasons for the success is because we found that fragrance is a personal product, and people have to go into a store and try it and smell it before they purchase it,” Lepler said.
The Limited also would not reveal the cost of the marketing investment.
With the pilot successful, The Limited plans another direct mail campaign based on these results, promoting Victoria's Secret Body by Victoria line of lingerie in late summer. Like the Dream Angels campaign, this one also will be targeted to Web-only, catalog-only and store-only shoppers to encourage them to try other channels.
In addition, the company in January finalized its Victoria's Secret Mega Brand database, which is also based on SAS' data warehouse system. “The database is organized by the customer, rather than the brand or the channel,” Lepler said.
Before this data warehouse was implemented, data were scattered around the company in different databases. However, Lepler said, the key to successful CRM lies in applying scalable analytics to a single, customer-centric database that gives a comprehensive view of all customer interactions.
“It's imperative to have a 360-degree view of our customers' activities across all channels because a single-channel view can't give us full insight into customer needs,” he said. “If you don't have a multichannel view, you may mis-categorize customers.” In addition, the database will “allow us to present one brand to the customer, whether it's store, catalog or Web.”
