This article is about my journey into using Customer Data for marketing over the last year. It opened my eyes to the future of marketing and I share real numbers below about its impact.
I, Christian Pillat, have been doing marketing for Franchise Brands & multi-location businesses for the past 8 years. I worked as a product manager for 4 years, then started my own digital agency which became rated one of the top 5 Franchise Marketing agencies by Entrepreneur Magazine in 3 short years. I have launched marketing campaigns for over 100+ franchise brands. I have literally built digital marketing products from the ground up and am considered by many to be an expert in Local Listings, Google Ads, Facebook Ads, and SEO. I also happen to be a multi-unit franchisee and test EVERYTHING in my own stores.
This story starts about a year ago when I was introduced to Ashley Messer, Founder of Transitiv. At the time, the VP of Operations at the Agency I started highly recommended him to me and pretty much forced me to take a meeting with him. Our VP of Operations said, “He is literally the smartest person I’ve ever worked with. I’m not exactly sure what he does but whatever it is will work.” We met for 2 hours and I grilled him on the complexities of his product. I didn’t understand why he kept talking about all of this “customer data and customer data platform” stuff. It didn’t make sense. My initial thought was, “Oh, just another guy trying to spin programmatic ads to me in a different way with some personalization”.
Fast-forward 6 months and several meetings later and I finally agreed to test Transitiv, the Customer Data Platform, on my Franchise locations.
The next two weeks of implementation were really an education. Customer Data Platforms are most useful when connected to as many systems as possible. We needed to get Transitiv linked to our Point of Sale, CRM, Website, and App. By linking to all of these systems, we could use Transitiv to track all customer interactions in-store, online, and on their mobile devices. This tracking gave us an accurate representation of who our customers were and what they were purchasing. Also, Transitiv begins to build a profile for customers that we do not have Personally Identifiable Information (PII) on. It allowed us to start to understand what our customers were doing digitally before actually coming in the store and which marketing channels were most effective.
The next step, once we centralized all of our customer data was to run machine learning models on the customer data to understand which customers were actually good for our business. You’ve likely heard of the 80/20 rule. Where 20% of your customers make up 80% of your business. I suspected this was the case in our business but didn’t really understand how true it was until we had the data. We ran a Recency, Frequency, Monetary Value (RFM) model on our customers and it clearly showed we have great customers or people who come in 1-2x per year but no real in between. By clearly understanding this business challenge we could now design our marketing programs around the need of the business, not just guessing at what might be a good marketing mix to get more customers.
Taking the customer information, we created 2 marketing campaigns:
First, it’s impossible to bail out a boat if there are a bunch of holes in it. It’s easier to plug the holes, then begin bailing the water out of the boat. So, the first was a campaign to retain, upsell, and get referrals from our best customers. We began proactively reaching out to members who had not been into the salon in a while to make sure we did not lose their membership. This slowed the attrition rate of our memberships in a 3 month period by 58% across all three locations. Before Transitiv, our net new memberships were ~8-12/mo across all 3 locations. By stopping our attrition, net new memberships began climbing by 25-30/mo across all 3 locations. Our average member is worth $996 annual so that simple stopgap has been worth 15-20K/mo in annualized revenue.
Second, we wanted to target more customer and drive new business. By using the same RFM model mentioned above, we were able to create look-alike audience based on our best customers, not all of our customers. To this look-alike, we promoted a Free Scalp Massage to first-time customers. In the 3 month period, we tested vs the previous 3 months and previous year results and saw a 28% increase in prospects vs the previous period and an 18% increase in prospects year over year. We used the same keywords & creative but simply narrowed the audience.
What does this mean in terms of actual business results? In an aggregate 3 months, here are the total revenues from each store:
Store 1 Control: 63,389.98
Store 1 CDP Pilot: 80,548.78
% Growth in 3 Months: 27%
Store 2 Control: 103,936.87
Store 2 CDP Pilot: 124,566.23
% Growth in 3 Months: 19.8%
Store 3 Control: 54,554.92
Store 3 CDP Pilot: 64,892.91
% Growth in 3 Months: 18.9%
The only change we made to marketing during this period was removing our typical PPC/Facebook vendor and using Transitiv to orchestrate all of our media buys. The difference has been absolutely massive to the bottom line of the salon business.
Additionally, Transitiv made prescriptive recommendations about future budgeting based on the results of the campaign. Now, rather than licking my finger, sticking it in the air and trying to rely on Google Analytics, I had a platform that could actually tell me what pieces of marketing were driving sales and which pieces were not. I could tell the effects of removing a media channel or sometimes Transitiv would tell me there would be virtually no difference in business if I removed a channel. This was the type of business insights I wanted to provide our customers.
After the pilot, obviously, we continued with the Transitiv platform. In addition, I sold my agency and have now take a full-time position at Transitiv. A lot of people have asked why I would leave the company I started 3 years ago. A place that I loved and poured blood, sweat, and tears into.
The answer is, seeing is believing and I experienced the results of Transitiv firsthand. This may be a millennial thing, but I want the work I do the be impactful. I want to push the marketing industry forward and create real value for small business owners.
Christian Pillat is co-CEO of Transitiv, a customer data platform focused on serving franchise brands. Transitiv helps brands pull all of their customer data from all systems holding that data and bring it into one place to make it actionable for marketing teams. Brand time to value using Transitiv is incredibly quick because of its patented technology and short implementation cycle. Schedule a demo today!