CONTEXT
Nacional Monte de Piedad works from the pawning modality with unique products. Jewelry and watches are its main categories, with many of its items being luxury. Despite being in the market for more than 200 years and having branches in almost all of Mexico, they have only been selling online for 8 years. Its Sales Manager, Alejandra Hernández Zavala, the protagonist of this case, has been working there for more than 5 years.
At Data4Sales we talk every day with teams like Alejandra's, who seek to understand their customer base and face challenges. Even more so in events like the HOT SALE, which are the final of the championship, not just another game. We must use all the resources we have at hand not only to acquire customers who align with our brand, but mainly to develop the ones we already have, taking advantage of First Party Data to get to know them in depth.
At this time of year, consumers are more open to buying, but the competition is also more prepared to sell. It is here where we have to find a differential strategy and we want to show you that understanding the data is the real path for that and that it is not necessary to be an expert, but to have the right tools.
We will use the challenges and strategies we work together with Alejandra and her team as a guide.
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CHALLENGE
Nacional Monte de Piedad needed to overcome some challenges in order to develop a successful digital strategy. They knew they had information about their customers, however, they were not able to segment correctly and also felt that they did not know their buyers in depth.
The waste of time in eternal Excel lists, having to cross one with another, did not allow them to dedicate themselves to the knowledge of customers, nor did it help for a correct visualization of the data.
In turn, the supply of the digital channel had to be optimized. Knowing exactly what customers are looking for, and at what time, facilitates this process.
There is one very important factor to keep in mind and that is that you can never work for your entire customer base. We have seen a lot of success in terms of profitability in companies that do deep strategic work to understand how to retain worthwhile consumers and how to win back those who stopped buying. Now, what can I do to understand who to invest efforts in to get to know my customers better?
STRATEGY
First and foremost, it is important to ask the right questions. The data has all the answers about our customer base. However, it is not good just to analyze, we have to understand how to implement the opportunities we find.
One of the most important challenges we had with Alejandra was the right segmentation. To start working on a pre HOT SALE, it was necessary to ask the question that triggered the strategy: How is the turnover of the business composed in a HOT SALE? Is it mostly from new or repeat customers? We can know this by analyzing the turnover information from last year's event or from a more recent event to have a more recent look.
An important fact to take into account in this type of dates is that in a large number of businesses, more than 80% of the customers acquired on special dates, do not buy again. After a great effort to acquire them, both in terms of time and money, it ends up happening that most of these customers are not profitable for the brand.
Then, understanding your buyers and their correct segmentation will allow you to adapt strategies for the different groups of customers, targeting mainly those who are profitable for the brand. Otherwise, you will generate an unprofitable customer base.
CUSTOMER DEVELOPMENT & REACTIVATION
Acquisition is undoubtedly more expensive than retention and takes longer.
You can work with the customers you already have: analyze their behavior and characteristics, segment them into different groups and predict the probability that they will buy from you again.
In this way, you can go out and acquire customers similar to those who buy the most in your business and also develop strategies to sell more to current ones. The average ticket of a customer who already knows you is much higher.
A retention strategy cannot be the same for your entire base, you must understand on whom to put more effort. Not all customers need the same thing and not all are worth investing in the same way.
With the study of your customer base, you define which customers to retain, which customers to reactivate and which customers to develop.
What is the most decisive factor? The LifetimeValue: How much potential value does a buyer have for your brand and how much more will they spend, i.e., how likely is it that they will leave revenue in your business going forward? Artificial Intelligence becomes a spectacular ally in this process.
Since we started working with the Nacional Monte de Piedad team, Alejandra uses the seven intelligent segments that Data4Sales provides her with on her customer base on a daily basis:
CHAMPIONS | CAN'T LOSE THEM | ONLY BY THE WAY | OCCASIONAL BUYERS | LOYERS | LOYAL CUSTOMERS | PROMISERS | AT RISK
By analyzing each one, her team can understand the weight they have for the business and what strategies to use to generate repurchases, customer recovery and acquisition.
These segments can be cross-referenced with more information, such as where each customer is in the lifecycle.
PROSPECTIVE | INACTIVE | FIRST PURCHASE | SECOND PURCHASE | FREQUENT | REACTIVATED.
And in turn, with buying patterns such as:
When we develop a strategy to reactivate customers who have not been buying for a long time, the investment is different for each group we impact. An inactive customer who used to have a low average ticket and bought only once is not the same as an inactive customer who used to have a high average ticket and bought three times. That is why the correct analysis of the data is so important.
The recency of Nacional Monte de Piedad is 90 days, this means that if a customer did not buy again after this period, he/she will be shown as inactive. Alejandra and her team developed reactivation strategies through Google Ads and Meta during March and April, impacting inactive customers with higher Lifetime Value.
There are buying patterns that are key to know. We see in some brands that certain buyers are only interested in the product at launch, because they want exclusivity. Knowing this detail already defines the way in which we impact this group.
Alejandra highlights the possibility of working with Champion customers, which is a segment generated thanks to AI and uses the customer's Lifetime Value as a guiding metric. These people have a great weight in the brand's revenue. By being able to see at what point their buying behavior changed, they can be attentive and take immediate action to take care of them.
Another important segment is those shoppers you can't lose. These people have a high probability of buying from the business again. The tool is telling you "Hey, keep an eye on this segment, because if you don't invest in it, if you don't dedicate time and strategy to it, you can lose it and this means you will sell less."
A strategy of this kind changes the way many businesses look at things: from product centricity to customer centricity. It's no longer all about the product, but about the needs that customers have. I must first understand who is interested in my product, my brand and who has already bought from me. Product analysis is useful to understand, for example, which product goes with what a customer has already bought, in cases of items that are not recurrent and we want to seek repurchase.
For Alejandra, the product-segment relationship is essential when supplying merchandise to the digital channel. "In a super simple way I see on a screen what type of product each segment bought, although the product is not repeated because Nacional Monte de Piedad works with unique pieces, if we know the specific category, we supply the stock based on what the customer wants. For example, if such a customer usually buys watches of a certain style, we will add more of them. We can tell him: this product arrived and it's special for you."
Despite being a traditional business, Artificial Intelligence adds value in predicting shopper behavior and automating processes. This saved time and money, which is now invested in getting to know customers better and going straight to what they are needing.
"Now we can create a story," says Alejandra. "I can go back in time and with the information I have, create strategies based on behaviors." For example, analyze last year's HOT SALE vs. this year's, understand which campaigns work, which customers recovered, which products sold and what actions to take this year.
THE IDEAL COMMUNICATION CHANNEL
The selection of the communication channel for sending campaigns is a debate to be taken into account. Email marketing is a key medium, but results can be somewhat limited for certain strategies.
Data4Sales adds value to campaigns by offering something that other tools do not have: Lifetime Value. This metric enriches campaigns, making them even more targeted and with a higher conversion rate.
WhatsApp is a great option for communications, but you have to be very careful. It should only be used for small groups of customers close to your brand. It is useless to send messages to large bases that bought only once. It is a platform that we use for our personal lives, so it can generate a bad experience and end in an opt out.
In Data, we can work via WhatsApp with customer, product and order attributes. If a customer bought a product at a certain time and there is a high probability that they will buy again, we automate that communication for a few days later, offering something based on their behavior to achieve repurchase.
From Nacional Monte de Piedad, the strategy via WhatsApp is highly successful. When there are very specific products that we are looking to sell to collectors, we create a small and closed segment with a high LTV. The communication usually includes a video of the product so that they can watch it and also, thanks to the fact that it is done within Data4Sales, they can continue the conversation if a customer responds to the campaign. This type of service requires very careful customer service and generates a strong bond with the customer. This way, a strategy is 100% personalized.
In turn, working with abandoned carts via WhatsApp can achieve very good results. Email marketing does not generate as much conversion for this type of campaign. The first thing is to understand what state a person who abandons a cart is in using the customer lifecycle machine. If he is a prospect I can send a discount because I need to convert him into a customer, if he is inactive I will think of a strategy based on his behavioral history. By performing the right analysis, I develop the perfect offer for each buyer's state.
We want to make it clear that for this type of strategy you don't need to be an expert in the field. We prioritize simplicity in data analysis and support to our clients, with whom we work side by side to see them grow. Downloading information together with them and discovering opportunities together is part of our service.
