The world's largest office products supplier relies on SAS for customer intelligence.
The largest office supplies reseller worldwide, Office Depot has a significant market presence in European countries including the Netherlands, UK, Belgium, France, Germany, Italy and Spain. Through its mail order channel alone the company has more than 2.5 million active customers.
To support its continued growth, Office Depot has developed a Europe-wide customer contact strategy based on individualised offers, customised pricing and selective promotions - and at a frequency designed to maximise both share of wallet and customer profitability. SAS has played an integral part in driving this strategy forward. According to Sabine Zwinscher, Vice President Mail Order Europe, "We have achieved virtually one-to-one customer contacts through the use of consistent pan-European processes and procedures, supported by SAS. We have reduced our advertising spend enormously."
A market leader
Zwinscher says, "Customers want our service to be hassle-free, friendly, fast and reliable – and that's what we do. We strive to be very successful at an operational level and complement this with analytical approaches. We have a fanatical dedication to service, which means having motivated people with the right tools to deliver such a service." This approach is necessary because, she says, the last few years have seen the office products sector become increasingly competitive. "More people want to sell these goods because they are considered easy to sell. But achieving excellence in execution is a different matter. How you market products and approach customers, through differentiated marketing strategies and responding to their needs, is a critical differentiator."
Gaining the ability to effectively target specific segments, such as the self-employed and office-at-home users, means the mail order business has the potential to sell goods to a far bigger consumer market – if it can do so efficiently and cost-effectively. "This is exactly the sort of thing we're aiming to achieve," says Zwinscher. "If you go look at what we're doing with SAS, we're profiling customers to explore what they are likely to buy in the next six months, their order frequency, average order value, and more, and so better manage our advertising dollars and offer promotional prices, once we understand a customer's sensitivity to such offers.
"Our customers communicate with us and order products in different ways, through our contract business, the web, mail order catalogues and telephone. We need to support these different approaches. We looked at SAS Marketing Automation as a way to achieve a multi-channel, multi-brand, multi-order optimisation of our company-wide processes." She says a key strength of SAS is its flexibility: a customisable solution founded on proven capabilities and functionality.
Reduced marketing spend
Zwinscher says this activity has two sides. The first is using SAS to profile customers and understand their purchasing behaviour in order to better allocate advertising spend: executing the right contact strategy at the right frequency to gain a response. The second is including the right content and promotions, an activity that must be carefully managed to enable Office Depot revenues to continue growing. "Our company is aiming for profitable growth, so you need to look at all the various dimensions," she says. "It's a complex environment."
Knowing more about customers
Developing a data warehouse was a key aspect, while the business case for a new approach to customer intelligence included a commitment to reduce advertising costs by one percent across Office Depot's European operations, measured on the basis of marketing costs divided by sales. In practice, the reduction in costs is expected to be double that. Zwinscher adds, "With the help of SAS we've developed and strengthened our business models rapidly in all the markets in which we operate. It's all about looking at customers. And the closer you get to 1 to 1 marketing with a customer, the better your relationship becomes with them. Every year we can keep a customer, that's of a much higher value than having to acquire lots of new customers."
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Vice President Mail Order Europe
Increasing customer spend and driving higher profits across multiple pan-European sales channels
SAS Marketing Automation for campaign management to segment and target customers with personalised offers
Reduce marketing spend by knowing more about customers
“ We have achieved virtually one-to-one customer contacts through the use of consistent pan-European processes and procedures, supported by SAS. We're expecting to reduce our advertising spend enormously: we spend between 300 and 400 million euros on marketing each year and anticipate reducing this by two percent. ”
Vice President Mail Order Europe, Office Depot