36
BUSINESS DAY
Wednesday 20 June 2018
Leadership SHAPING PEOPLE INTO A TEAM
How vineyard vines uses analytics to win over customers (Dave Sutton is president and CEO of TopRight, an Atlanta-based strategic marketing firm, and the author of “Marketing Interrupted.”)
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hen brothers Shep and Ian Murray cut their ties with corporate America to start a little company on Martha’s Vineyard in 1998, their motivation was clear: “We’re making neck ties so we don’t have to wear them.” Little did they know that the business they founded, Vineyard Vines, would become a darling of the fashion industry and a household brand in the U.S. Today, the company best known for its smiling pink whale logo offers much more than its signature neckwear. Vineyard Vines manufacturers a full line of “exclusive, yet attainable” clothing and accessories for men, women and children. That “little” privately held business has grown tremendously since its launch and currently has more than 90 physical retail locations and a highly successful e-commerce business. I met the team at Vineyard Vines while doing research about datadriven marketing technologies for my book, “Marketing, Interrupted,” and was able to learn the secret to the company’s success. From the very beginning, the Murray brothers believed first and foremost in connecting with and understanding the unique needs of their customers. As the current vice president of Marketing, Lindsey Worster, told me: “We are all about getting the right message, about the right product, at the right time to our customer — targeted, relevant and authentic communication is our primary goal.” Of course, this type of real-time, one-to-one marketing is easier said than done. As Vineyard Vines has rapidly grown its customer base, so too has the size of its customer database. Terabytes of data have been captured. Hundreds of attributes, encompassing customer profiles, preferences and
buying behaviors must be parsed into actionable insights in order to deliver a highly personalized experience. Like many competitors in the apparel industry, Vineyard Vines has kept its operations lean in order to preserve operating margins. This means that the retailer simply doesn’t have the human resources to perform the onerous data analysis and behavioral segmentation needed to inform true one-to-one marketing. So, over the years, Vineyard Vines has fallen into the trap of relying on traditional “batch-andblast” communications to reach its customers, promote its products and make offers. Though this strategy was inconsistent with the guiding principles of the company’s founders, batch-and-blast was thought to be the only way to keep the cash register ringing. But as Worster acknowledges, “With the batch-andblast campaigns, we were sending the exact same message and static images to millions of people, and that just isn’t the best way to communicate with customers.” In July 2016, the e-commerce team at Vineyard Vines set out to find a better way to keep pace with its dy-
namic customer base while staying true to the company’s principles of authentic, relevant and personalized communications. The team was looking for a retailer-agnostic platform that would integrate Vineyard Vines’ online customer and products data to enable true one-to-one messaging. As we all know, Amazon.com has the technology to do this, but it’s proprietary and not available to other retailers. Enter Fayez Mohamood and his team at Bluecore, a retail marketing automation platform. The solution that Mohamood and his team developed correlates customers’ ehaviors and their interactions with the retailer’s online product catalog. Based on these analytics, Bluecore builds intelligent, triggered campaigns that can be run across email and social media channels, or be used to optimize search engine marketing. At the heart of the solution sits a decision engine driven by artificial intelligence that determines the timing and content of the best campaign to send to individual shoppers. The decision engine understands which customers have price sensitivities (and therefore are
motivated by discounts), what items an individual customer has viewed, what those items have in common with other items the customer has engaged with, which products are replenishable and at what cadence a specific customer replenishes them, which activities predict a next sell, the right timing to contact a specific customer, a customers’ lifetime value, and so on. Initially, Vineyard Vines deployed the technology to tackle obvious challenges like triggering emails for abandoned online shopping carts, abandoned searches and abandoned browses. But after seeing the increases in revenue per email from those initial messaging efforts, the marketing team decided to expand its use of the dynamic decision capabilities of the platform — what Bluecore refers to as “predictive audiences.” This part of the platform enables Vineyard Vines to send personalized messages based on a customer’s online behaviors, purchase transactions and level of personal engagement with the brand. Next, the marketing team quickly set about using the platform to automate campaigns for specific use cases where personalization and
c 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate
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relevancy had always been a challenge, including: — Notifying customers when highdemand products were back in stock. — Communicating last-chance offers on stock-out items. — Running holiday-specific and special event campaigns. — Predicting when a customer may be in danger of unsubscribing. The days of batch-and-blast campaigns for Vineyards Vines may soon be over, as the results from the campaigns using the new decision engine have exceeded expectations. What can other companies learn from Vineyard Vines’ success? A few best practices stand out: — Engage with customers on a one-to-one level. Such direct communication is no longer a “nice-tohave” — customers expect it. — Overhaul your batch-and-blast approach to email marketing by integrating behavioral data and predictive algorithms to create highvolume campaigns that are unique to each recipient. — Provide your loyal customers with the best experience at every touchpoint. — Target customers in a personalized manner across more than just email, and determine the best channel mix for each one. — Gain a deeper understanding of customer engagement with your products. Without tools like Bluecore, retailers don’t have a clear understanding of which products customers are interacting with, or the commonalities across products that a single customer has engaged with. They also don’t know when a product’s status changes. The moments when a product decreases in value, goes out of stock or returns to stock should each trigger a response from the retailer. Most retailers struggle to understand how and why customers engage with particular products unless they buy them or abandon their shopping carts. Today, there’s so much more that can be done to better serve customers, and to ultimately make your company more successful.