CONTEXT
Sally Beauty is one of the largest beauty chains in the world. It has 5,000 stores in 13 countries; in South America it is located in Chile and Peru. This company offers products related to hair, skin and nail care, with recognized brands in its catalog, such as Loreal, Olaplex, Schwarzkopf and Revlon, among others.
Its eCommerce has as B2B and B2C manager a man with more than 10 years of experience in the industry: Felipe González; the protagonist of this story.
Working for many years in the same role forces you to adapt. Even more so when this position is linked to technology. Advances go fast, they almost run. You are behind, trying to reach, to sell, to do whatever it takes to get results beyond the context.
Felipe lived the pre, during and post pandemic in a position that underwent major changes in a very short time. Before, the eCommerce team was in the shadows, they were not recognized and every sale was a goal to celebrate. Pandemic arrived and began its reign; everything went digital, the numbers skyrocketed and so did the team's recognition.
But the post-COVID, even though the number of online sales undoubtedly increased, meant going back to looking for meaningful strategies to find customers. It is very difficult to demand the same results as during COVID when the reality is different, but Felipe and the Sally Beauty team are going to close this year with the same sales as during the pandemic.
How did they achieve it? We tell you the formula.
A CYBER WITH DATA
Commercial dates like Cyber are not just another game. They are the final. They are those days where all eCommerce teams, in one way or another, compete for the attention of customers. As consumers we are more willing to buy, sometimes we even wait these days to buy that product we want so much.
People who work in eCommerce prepare ourselves, think of offers, try to innovate and make the shopping experience unique. But for that, it is necessary to understand how our customer base is made up. Who buys from us during these dates? The Sally Beauty team thought they knew their customers, however, they found surprises when they began to analyze what was happening in their business.
CHALLENGE
We met Felipe during an eCommerce Day in Chile. From that moment on, we started working together to understand Sally's challenges and how we could help them.
To start we needed to understand how their customer base is distributed. To that end, we analyzed the transactional data of the business: We connected to their e-commerce engine and processed their purchase orders. From then on, understanding Sally's customers would be an accessible process for anyone on the team.
During the analysis we discovered a big opportunity: in the pandemic the brand acquired a large number of customers. Many of them had bought only once, some twice, and some had become frequent, but some were inactive. What does this mean? That the time set by Sally Beauty as the ideal repurchase period had passed (180 days)
We often put the focus on acquisition without looking at which customers we are attracting and whether they are ultimately profitable for the business. It is essential to think about what happens to the customers we have information about, that we can analyze their behavior, preferences and characteristics. Your regular customers also want to be surprised for CYBER, they will come into your store looking for something special these days. The purpose of these actions is to strengthen your relationship with them, increase their average ticket and their purchase recurrence. Based on the data you already have on their behavior and characteristics, you can create the perfect offers and actions for them.
Here an important question arises: if we have a high number of customers who have already bought from us, what can we do to develop them? The answer is clear: the first step is to understand them."
The key point is that once you have your customer data, it is much easier to retain them than to go out looking for new customers." Felipe Gonzalez.
STRATEGY
Together with Felipe's team, we set pre-event goals:
1. Understand where revenue comes from on special dates.
2. Know the customer lifecycle: active and inactive.
3. Define which customers they will spend more time and money on.
The right questions are essential to find the path, which is guided by understanding the data.
Whowere the allies for the strategy?
1. VTEX (eCommerce Engine, First Party Data)
2. Data4Sales (Customer Data & Artificial Intelligence.
Oneof the most important questions we should ask ourselves during these dates, is where the most revenue comes from. This is where two big groups come in: NEW CUSTOMERS VS RECURRING CUSTOMERS.
In Sally's case, the analysis allowed us to know that 65% comes from new customers. It is possible that many of them will not choose your brand again.
"More than 80% of the customers you acquire on special dates do not buy from you again.
Sohow do you avoid depending on new customers? These consumers are expensive for us, their cost is high given the fight for the same buyers at commercial events.
The objective of these dates should be to develop current customers. Why? Because from these people we already have valuable information to work with to grow our business in a sustainable way. The average tickets are higher in recurring customers, who already know you.
By accessing data about your current buyers, you demolish myths and beliefs that lead you to develop erroneous strategies. In addition, you get to understand who you should develop based on the relationship they have with your brand and especially the metric that should be a guide in our business: the Lifetime Value.
For a correct understanding, we start using the Customer Life Cycle Machine:
Withthis functionality, I can see how is the relationship I have with each group of customers. The key data I need to enter is recency, i.e., how often a customer should buy from my business again. In the case of Sally Beauty, this period is 180 days.
My customers can be divided into the following groups: PROSPECTIVE | INACTIVE | FIRST PURCHASE | SECOND PURCHASE | FREQUENT | REACTIVATED.
By being able to visualize the buyers in this way, I identify different ways of working with each group and can find the answer to my key questions: Which customers do I want to acquire? Which customers do I want to develop? Which customers do I want to reactivate?
As a first distinction against the life cycle, there are two main groups: active customers and inactive customers.
Active customers: bought once, twice or more (known as frequent customers)
At sally, more than 80% of the base only bought once, these acquisitions involved effort and costs.
Inactive customers: those I have to win back.86% of Sally's base was inactive, this is an opportunity for the business, she was achieving successful numbers with only 14% of her customer base.
Whatcan I do with all this data?
We identifiedthanks to this data that it is necessary to work with the customers we already have, achieving with each group of customers their objectives. Those who bought once, those we must win back and those we must develop to increase their average ticket. It was important to define which customers we should dedicate more time and investment to, since not all of them are the same and do not need the same.
"The customer who has already bought from you once and had a good experience is easier to win back. Even more so when they are products that you need to buy frequently. For example, shampoo or conditioners. We take the data and generate strategies to find that purchase thanks to the information we already have about the customer." Felipe Gonzales
CYBER Shares
The actions during the event were based on two main lines:
CYBER 2023 RESULTS
We set out not to depend on new clients and in this way, we achieved:
Of the 100%, +48% of the turnover came from recurring buyers:
"In this way we were able to develop clients, reactivate those who had not purchased for a long time and have a higher average ticket." Martin Bermudez CMO AND CREO of Data4Sales.
Increasedrevenue by 46%.
128% growth in orders from recurring customers.
During the CYBER period, customers bought more than once.
CYBER 2024
They will apply a strategy through WhatsApp, with a focus on recovering carts by lifecycle and seeking a second purchase in high LTV customers. In strategies for abandoned carts, conversion rates leveraging Data4Sales are between can reach up to 40% conversion. By targeting shoppers with a high LifeTime Value, highly personalized messages with irresistible offers can be applied through WhatsApp, allowing us to turn on automations and go for re-purchases, depending on what they have already bought.
In turn, we will start working on the brand's physical stores, achieving an advanced omnichannel strategy.
