Zavvi

Segmentation to drive millions in increased revenue

We’d already been hugely successful with the Virgin Holidays eCRM programme, and we had redesigned the Virgin Megastores e-commerce site, working with Hybris and Mercado (now Omniture Merchandising). The Virgin Megastores site was a great success – then the operation was sold in a management buyout and rebranded Zavvi.

Zavvi hired us to take over its eCRM programme: we performed detailed data analysis, created a robust revenue model, and rolled out the programme via a series of highly-targeted pre-Christmas email campaigns.

During the project, the analysis and segmentation strategy part of which lasted six months, we discovered several things. If we could change the average purchase frequency across the entire base from 2.9 purchases per year to 3.1, then overall revenues would rise by £3million.

And that by testing the long tail – which is only really possible with digital channels, because reaching every segment is only affordable online – we identified a few hundred people who, every time there was a 30% discount or BOGOF offer, bought thousands of copies and sold them on eBay at a profit. Identifying this tiny segment, just 300 people out of 2.6 million, allowed us to tailor targeted promotions to perfection.