This post originally appeared in our SAS Voices blog, published by my colleague and fellow blogger Courtney Peters. It's a great story about how Oberweis Dairy harnessed the power of marketing analytics to cultivate loyalty. That effort has helped them grow from a family-owned dairy farm to a major regional food manufacturer and retailer.
It’s no secret that marketing analytics helps large organizations determine what offers are best for their customers and their business, but can powerful marketing analytics be harnessed for small and medium business success? For the answer, I turned to Oberweis Dairy, a 90-year-old mid-sized business that has grown from a family-owned dairy farm to a major regional food manufacturer and retailer.
Oberweis, like many SMBs, wanted to do more than just simply increase customer loyalty rewards - they wanted to better understand consumer behavior across the board. After looking at the data they determined they could deliver additional customer value across channels and achieve a higher return for the business.
In the paper, Using Analytics to Drive Customer Loyalty: Three Real World Examples, Bruce Bedford, Vice President of Marketing at Oberweis, outlines three projects where analytics played the pivotal role in driving customer loyalty. Here are some of his findings:
- Project 1: Using Marketing Analytics to Promote Cross-Channel Behaviors
Oberweis has ice cream shops spread throughout the Midwest. It also has convenience stores, a consumer packaged goods division and a subscription-based home delivery service. The dairy stores operate on a point-of-sale (POS) system, but the home delivery business operates on an independent enterprise resource planning (ERP) system. To see cross-channel behaviors, Bedford said, Oberweis used the store’s Moola loyalty cards to link customer account records across the two systems. Now Oberweis can determine each time a home delivery customer walks into a store and purchases fresh ice cream.
- Project 2: Using Marketing Analytics to Improve Customer Service
Next, the company decided to focus on its 46 dairy stores. At the stores, customers were having trouble deciding what they wanted to order before they reached a cashier because the menu was too complex. The company decided to test a series of menu board concepts and evaluate them based on the year-over-year profit change observed in test stores. Using analytics, Bedford was able to accurately assess the results from the tests. Clearly, an accurate, thorough understanding of data requires using sophisticated analytical techniques. Only then can you be sure of the results – and the effect on your bottom line.
- Project 3: Using Marketing Analytics to Improve Customer Retention
The home delivery business at Oberweis makes about 1.4 million deliveries of farm-fresh milk annually across six states in the Midwest and Virginia. Like any subscription-based business, this division routinely takes steps to acquire more customers and keep them satisfied and loyal. Oberweis uses three primary methods to acquire new home delivery customers: a door-to-door sales team, direct mail, and their website. After collecting data from each one of these channels for one year, Oberweis was able to set up a strategic testing model that ultimately unveiled a new promotional plan, improving their retention rate by 35 percent.
In many loyalty programs, businesses offer their customers more than they should in attempts to keep them happy. It is such a simple concept but one that is missed by many SMB’s: With marketing analytics, businesses can reduce customer overkill, determine what your customers really want, and then decide what types of value they will appreciate. This knowledge is invaluable for businesses that use time-dependent data to drive important decisions.