How VARUS Achieved ROAS of 1073% Thanks to RFM Segmentation and Welcome Series

Segmenting a customer base is essential in creating an effective marketing campaign that allows you to personalize communication. The survey shows that consumers spend an average of 38% more when their experience is personalized.

The beginning of communication with a customer, such as a welcome email, has a significant impact on its further effectiveness because

• 74% of consumers expect a welcome email immediately after subscribing to a newsletter;
• welcome emails generate an average of 320% more revenue per message than other promotional emails;
• new contacts are most engaged within 48 hours after subscribing.

In this case study, we will tell you how VARUS implemented RFM segmentation, what content they chose for communication with different groups, and what results this approach brought.

About the Project

VARUS is one of the largest supermarket chains in Ukraine with 100+ stores in different cities. In 2022, the company integrated the Yespo omnichannel CDP for online marketing. Since then, VARUS has been using such channels of communication with customers:

• Email
• SMS
• Viber

In addition to promotional campaigns, the brand also sends transactional triggers regarding order status, payment, etc.

Task

VARUS identified three main goals to achieve by using the Yespo functionality:

1. Activate the contact database – to start communicating with existing subscribers and evaluate their response to different types of messages.
2. Collect data – information about the audience's behavior and preferences to understand their needs better and segment them for further campaigns.
3. Generate leads – to attract potential customers and encourage them to convert, for example, to order or subscribe.

Solution

To achieve the goals, the VARUS marketing team and Yespo's technical specialists implemented RFM analysis. Then, an appropriate communication approach was selected for each segment.

Integrating RFM Analysis

RFM analysis is one of the most effective methods of audience segmentation based on customer behavior and built on campaigns or sales data. Segments are formed taking into account:

• The recency of the purchase/reading.
• The frequency of purchases/readings.
• The monetary — how much money the customer spends.

VARUS divided its audience into five segments:

1. New customers are those who have just registered on the website. Despite the low analysis rates, such contacts are considered the most promising because they have not yet had time to form preferences, habits, and loyalty to the company.
2. Inactive customers are those who have unsubscribed from newsletters. This segment is considered the most unpromising, as contacts are no longer interested in VARUS and its products.
3. Forgotten customers are those who have not opened the company's letters for a long time. Businesses consider such contacts to be potentially lost.
4. Former customers are those who have already ordered something on the website but no longer do so. It is the most difficult to work with contacts in this segment because the reasons for the lack of orders can differ.
5. Fans are those who often make online purchases in the store. This is the most valuable type of customer as they bring VARUS the most money.

Creating Campaigns for Segments

Each of the five customer groups requires a personalized approach, so the next step is to decide on the content for emails, SMS, and Viber messages.

It is important to introduce new customers to the company's offers and motivate them to make the first purchase. To do this, VARUS created a welcome campaign. Its emails told about the site's functionality, promotions and discounts, and unique offers for newcomers.

The business does not interact with inactive customers, hoping they will return to the website independently.

Forgotten customers receive special offers with a limited validity period – VARUS uses the FOMO marketing technique to encourage people to repeat the purchase.

Former customers receive messages with discounts on products, free delivery, or gifts for their orders.

The company tells its fans about entertainment, great deals, and new products and services.

Features of the Welcome Series

The VARUS welcome campaign consists of three emails: confirmation of registration on the website, a promotion for newcomers – a 100 UAH discount for the first three orders over 700 UAH, and a questionnaire to get to know subscribers.

The First Welcome Letter

In the first email, the company asks a person to confirm their email address and add animated content to the letter.

The Second Welcome Letter

In the second welcome email, VARUS announces what will be helpful in future newsletters and offers to take advantage of a 100 UAH discount for the first three online orders over 700 UAH.

The Third Welcome Letter

In the third email, VARUS offers to fill out a customer profile and uses attractive animated content again. The email asks to share the following information: name; photo; date of birth; gender; and presence of children.

VARUS stores the received data in CRM. In addition, information about birthday and gender is recorded in additional fields of the single customer profile in the Yespo account. Subscriber data can be used for further segmentation and personalization of communication.

After the welcome emails, communication with the client flows into Viber and SMS. Messages are sent every five days – first in Viber.

If the customer doesn't have Viber, they will receive an SMS in 5 minutes. This logic works until the first three orders are made.

Results

Thanks to the implementation of RFM analysis and the welcome series, the return on advertising spend (ROAS) amounted to 1073 UAH. This means that 1 hryvnia invested in the welcome series turned into 10.72 UAH of profit for VARUS.

The company has now implemented the functionality of the Professional pricing plan and is testing it. The company plans to test mobile push notifications and make the most of such triggers:

• Regular demand
• Reactivation of sleeping users
• The product is now in stock
• Abandoned view
• Abandoned cart

If you want to increase your ROAS or improve other marketing campaign metrics, sign up for a personal consultation with the Yespo CDP team. We will find a solution that meets your business's needs.

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