40 At dunnhumby we're in the business of dealing with retailers around the world and it's become crystal clear that there is no such thing as an average customer. Indeed nothing aggravates customers more than being confronted with irrelevant marketing and junk mail. Mr D. O. R. Mossman, whose letter from The Times is printed on the previous page, is clearly agitated by the way an insurance company has wasted his time by sending him a leaflet that is not targeted towards him in any way, shape or form. As Mr Mossman is not a 44- year- old woman, living in a particular area, driving a specific car, he will not qualify for the £ 200 discount on his insurance. Then why waste his time by sending him the leaflet? It's irrelevant to him. By helping retailers become better acquainted with their customers and personalise their offers accordingly, we're fighting the good fight against junk mail. Eradicating irrelevant marketing is good for customers and good for business. While the industry average for opened direct mail is a measly 1%, as many as 98.4% of Tesco vouchers are redeemed by customers. Indeed, around the time of year when the quarterly statement is due, customers inundate the Tesco call centre wanting to know when their statement is going to arrive. Tesco's quarterly statement contains three separate rewards for customers. First, a voucher which represents 1% of the value of their shopping, second, some targeted coupons from a customer's favourite brands and third, some coupons from brands they may not have tried but might like, according to the data. Tesco also sometimes sends direct mail on behalf of suppliers to relevant households, showcasing generous offers. So why is Tesco's quarterly statement so successful compared with average direct mail? The answer's simple - it's relevant. Cat owners are not sent promotions about dog food, vegetarians are not sent coupons for steak, tee- totallers are not sent price reductions on wine. Tesco customers don't regard their Clubcard statement as junk mail, but something they've signed up for and want to receive. It's part of the contract between Tesco and its customers. This is the difference between personalised communication and irrelevant junk mail. any colour you like as long as it's any colour you like
41 the end of irrelevance So what can customer data teach us about being relevant? There are 14m Tesco statements sent every quarter, with around 8m variations, so the majority of customers are getting an entirely different communication from one another. The only reason there are not 14m variations is because Tesco's customer data shows that groups of customers share similar preferences. When a statement goes out, it accounts for one quarter of all postal deliveries a week. Tesco also works hard to create a programme over a year to ensure that its customers aren't inundated with similar offers but get a balanced set of promotions from different categories. Within two weeks of the quarterly statement being mailed, 80- 85% of the vouchers are redeemed. Similarly, over 20% of the coupons are cashed in. And all Tesco stores experience four spikes a year, after the statements are posted. Kroger's statement Kroger also began to mail its loyal customers regularly. Today, Kroger sends out a targeted mailing to its Kroger Plus members on a quarterly basis. And like Tesco, there is a big surge in traffic for a couple of weeks after the rewards are sent out in the mail. Significantly, Kroger has 10m loyalty card customers and 10m variations of its quarterly statement. In France, Casino has managed to target its communications just as effectively. In November 2008, Casino mailed 3.7m different statements to its 3.7m loyalty card customers. Kroger's programme is one of a kind in the US, because it truly rewards what customers do rather than incentivise them for what they don't do. It's been a runaway success. Kroger has received numerous letters from customers impressed by its new personalised approach. A customer called Marsha Boener wrote a letter to the president of Kroger supermarkets. " Thank you for your recent pack of personalized coupons. Obviously, your staff has paid attention to my buying patterns at your grocery stores. At last, a retailer who finally gets it!", she wrote. Similarly, on an internal flight to Cincinnati, on discovering that she was serving Kroger's chief executive, the flight attendant introduced herself to him, thanking him and complimenting him on the personalised statement, saying " we love it, it's the best thing we ever get."