Key CCG Services
- Consulting Services
- Database Analysis
- Customer Scoring and Segmentation
Hastings Entertainment, a retailer of multimedia products including music, videos, DVDs, books and magazines, has it all for a small-town Saturday night. The Amarillo, Texas-based retailer operates about 140 multimedia stores in the midwestern and western U.S. The company has a tradition of targeting underserved markets: towns with populations of 25,000 to 150,000, such as Prescott, Ariz., and Wichita Falls, Texas. To enhance the customer experience, many Hastings stores offer music listening stations, reading chairs, free coffee and kids’ play areas. With the expansion of big-box retailers beginning to encroach upon Hastings’ primary turf, efforts were required to preserve the franchises’ primary base of loyal customers.
CCG initiated a custom segmentation study to identify and differentiate the long-term value and loyalty of Hastings customers. The methodology made use of past transaction history including items purchased or rented, frequency of visits, preferred merchandise categories, cumulative expenditures and profitability margin by product.
Loyalty rankings were then constructed using the resulting customer value scores. A segmentation typology was developed to mirror consumer behaviors as represented in the loyalty and value measurements. This included classifications of the company’s most loyal and avid customers down to lower-value segments that contained customers who had exhibited little or no ongoing involvement with the Hastings brand.
When applied to the customer database, the scoring and segmentation methodology enabled Hastings to develop a tiered approach for implementing retention-oriented marketing communications. Marketing expenditures could then be allocated in direct proportion to the overall value of each customer tier. Hastings also used information from the segmentation to develop and launch a customer loyalty program. The program was designed to reinforce the company’s image in the minds of its best customers and to reward individuals for their continued support.