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Client: A $5 Million fruit catalog operation that sells primarily to consumers. |
Challenges: As with most catalogers, the company had focused upon reselling to their current customers and prospecting for new customers through list rentals. And, like most companies, they communicated to all their customers the same way -- that is, without discriminating between highly priofitable and unprofitable customer segments. The result was that growing mailing and list costs were not being recovered by proportionate increases in sales.
Solution: Management Analytics Group's strategy was to increase the profitability of the company's current customers. We segmented customers upon the basis of their profitability (Lifetime Value or "LTV"). With this new information, we recommended shifting the frequencies of their mailings and communications to reflect the relative potential of the profit segments that we identified.
Results: With Management Analytics Group's help, the company quickly refocused their sales efforts high-LTV customers. The company enjoyed a speedy 20% increase in sales with no overall increase in mailings.
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