How Great Clips Increased ROI 315% Without Over-Couponing

How Great Clips Increased ROI 315% Without Over-Couponing

COMPANY OVERVIEW

via Multi-Channel Campaigns Driven by Behavioral Data

customer journey analysis.

Great Clips faces a number of key issues in its acquisition and retention marketing, which needed to be addressed by the new program:

• Develop a program that was both e�ective and easy to execute, to ensure maximum participation from franchisees.• Identify techniques that can

motivate salon visits without deep discounts that would erode pro�ts.• Understand the customer buying

process, so that the stimulus was received at the right time.

• Deliver messages timed to customers’ haircut needs and

preferences.• Create messages relevant to customers’ demographic and behavioral pro�les.

Great Clips is a nationally franchised hair salon company, with over 4,200 locations and 40,000 stylists. They pride themselves not only on being the largest hair salon organization in the country, but also on using new technologies to manage customer relationships and to make it easy for clients to interact with their favorite salons.

For example, clients can check in online to reduce wait time at the salon, and stylists at any salon have access to a client’s hairstyle records, allowing clients maximum flexibility and freedom to access any salon or stylist for the services they need.

Great Clips also uses new technologies to acquire and serve new clients, to retain them, and serve them profitably. In January 2017, the company created a complex set of multi-channel campaigns integrating direct mail, digital and social media, and a mobile app, which salons could execute to increase client visits based on a highly personalized customer journey analysis.

Great Clips faces a number of key issues in its acquisition and retention marketing, which needed to be addressed by the new program:

•Develop a program that was both effective andeasy to execute, to ensure maximum participationfrom franchisees.

•Identify techniques that can motivate salon visitswithout deep discounts that would erode profits.

•Understand the customer buying process, so thatthe stimulus was received at the right time.

•Deliver messages timed to customers’ haircut needsand preferences.

•Create messages relevant to customers’demographic and behavioral profiles.

STIRISTA

JOURNEY 121: A DATA-DRIVEN PERSONALIZED MARKETING PROGRAM

The new program, dubbed Journey 121, began with the strategic identification of three key client segments:

1 2 3

Prospect to New (P2N) for customer acquisition

New to Better (N2B) to stimulate a repeat visit by a

new client

Better to Great (B2G) to win back dormant or

lagging clients

•Develop a program that was both effective and easy to execute, to ensure maximum participation from franchisees.

•Identify techniques that can motivate salon visits without deep discounts that would erode profits.

•Understand the customer buying process, so that the stimulus was received at the right time.

•Deliver messages timed to customers’ haircut needs and preferences.

•Create messages relevant to customers’ demographic and behavioral profiles.

Each segment was assigned a different offer designed to motivate salon visits with just the right amount of discount. The concept, known as Intelligent Discounting, ensures that the offer is appropriate to the target’s life cycle stage. For example, the program avoids discounts for regular customers, while providing a modest discount to motivate infrequent visitors to come more often, and larger discounts to attract entirely new prospects.

The goal for each segment was improved client ROI—profitable incremental growth in visits over 12 months—compared to a control group that did not receive the campaign promotions.

Then a digital platform was built, through which participating salons could order up campaigns based on customer behavior, specifically:

•Visit frequency, •Personal haircut cycle, and

•Proximity to the salon.

For Journey 121, which comprised three campaigns, the results were as follows: • Prospect to New (P2N) for acquisition: 2% growth in incremental visit pro�tability, for a 140% campaign ROI.• New to Better (N2B) for repeat customer visits: 4.2% growth., for a 315% ROI.• Better to Great (B2G) for customer win-back: 3.8% growth, for a 295% ROI.

This detail allowed salon owners to select the perfect offer and message to maximize profitability. They can avoid, for example, wasting a $5-off coupon on a customer who comes in for a haircut every six weeks, like clockwork. Instead, salons could determine where to invest their discounts, for example, in persuading new customers to come in for the first time, or sporadic users to repeat purchase more frequently.

Descriptive data such as age, gender, marital status and presence of children was available to customize the message in four personas: Married, Family with Children, Single and Senior.

Stirista collected the monthly target data sets, and mined its massive consumer database to add email, phone number, and any missing elements like name and postal address. Stirista also supplied the additional data that allowed this high degree of behavioral and demographic targeting, as well as the data about prospects in the salon’s trading area.

Moderate discount coupon offers available with variations by gender.

The multi-channel options available to salons included direct mail, display banners and retargeted digital ads, Facebook ads, Google AdWords and messaging inside the Great Clips app. Stirista also managed the

Facebook news feed advertising and the video display advertising for the program.

THE JOURNEY 121 PROGRAM WAS A WINNER

For Great Clips, the ideal success metric for marketing programs is simple: profitable incremental visit growth. A control group based on each campaign variable was established for comparison purposes. The math is also simple: They calculate profitability by taking the 12-month revenue of the test group versus the control group, less campaign expense, including discounts, and dividing it by the campaign investment.

For Journey 121, which comprised three campaigns, the results were as follows:

Let Stirista help you develop marketing programs that pay off with a positive ROI. Watch how Great Clips increased ROI 315% with Stirista here.

Contact Stirista at info@stirista.com or 1-866-321-8505.

Ajay GuptaCEO of Stirista

• Prospect to New (P2N) for acquisition: 2% growth in incremental visit profitability, for a 140% campaign ROI.

•New to Better (N2B) for repeat customer visits: 4.2% growth., for a 315% ROI.

•Better to Great (B2G) for customer win-back: 3.8% growth, for a 295% ROI.

More than 85% of salons participated in the program. A remarkable result. Great Clips is now rolling the Journey 121 program out nationally, and developing new offshoots, like a special grand opening campaign package for individual franchisees who are launching new salons.

The campaign won a Silver Echo award from the Digital and Marketing Association in the category of Best Retail Campaign of 2017. The Echoes are unique in the world of marketing awards, being the only award program that judges on both campaign

creative strategy and business results.

Journey 121 proved to be a sterling example of how data and multi-channel communications can be harnessed to support business partners and stimulate profitable growth. Said Heather Briggs, senior director of marketing planning, “Thanks to Stirista’s data and digital expertise, this program met and exceeded our goals in profitable growth, return visits and customer winback. At Great Clips, we look forward to continuing that partnership and celebrating further successes in the future.”

STIRISTA