How Gala Coral took the gamble out of CRM

Gala Coral’s customer relationship team has devised Six Step, a programme to ensure that not just senior managers, but frontline staff know what to do when customers’ engagement wanes. By Steve Hemsley

GALA

Gala Coral was by no means a safe bet for head of group customer relationship management Antony Smith when he joined the company two-and-a-half years ago.

Smith, who previously built CRM programmes at The Body Shop, Interflora and Jessops, discovered the bingo-hall-to-betting-shop group had numerous data challenges.

It had plenty of transactional data but no strategic marketing database. Its information was mined across legacy silo systems from group brands Gala Bingo, Coral, Gala Casinos and Eurobet.

With a group business across 10 million customers, 1,950 retail venues, four key websites and three call centres, Smith knew a clearer CRM strategy was needed following a corporate restructuring in June 2010. The company had no quick way of testing how or if a marketing campaign was changing customer behaviour or encouraging people to move between brands. Too much of the multi-million pound marketing budget was potentially being wasted.

He also knew that the group’s private equity shareholders would expect some return in the first year if there was going to be significant extra investment in customer relationships. He explains/ “It is easier now to get boardroom buy-in for CRM because senior executives have a better grasp of how it can help a business.

“It is no longer seen as the dark art it once was, when marketing experts promised they could discover and share all this marvellous information about your customers.”

Smith and his team devised an approach called Six Step, which was outlined at the Marketing Week Data Summit held in Brussels last mont). The thinking behind Six Step is that customers must be looked after throughout their relationship with a brand, when it starts to slow down and in advance of it lapsing.

Every brand must understand how and why a customer’s involvement with a brand dips so it can react in a way that is relevant to that person’s behavioural history. “If they lapse, the obvious thing to do can be to send them an offer. But they will often take up the offer and come back, but then lapse again. You must get to the root of why they have lapsed,” says Smith.

The group invested £2m in a Siebel database system because data is central to each step of the programme. All the data is now kept, cleaned and analysed in one place so Gala Coral has a single view of each customer.

“Over the past 20 years, the marketing industry has moved from using technology to allow a mass-market, one-size-fits-all approach to it being possible to have a one-to-one dialogue with customers,” Smith says. “But as marketers, we sometimes pick up these shiny new toys too quickly and lose some of the real basics of CRM.”

Customised messages

Customised messages: Coral.co.uk tailors communications to the individual customer

He adds: “We can use so much energy building a new database, overcoming IT and legacy issues and solving business needs that we lose sight of what we are going to do with that system once it is up and running.”

CRM technology can also mean campaigns become too complex, he warns. This can make the relationship with a brand less personal because the customer journey is over-complicated.

Smith says: “Years ago, the local butcher would put an extra pack of sausages in the bag of customers whose value he really appreciated. We mustn’t lose that human touch when it comes to nurturing customer loyalty.”

He claims the company now has a better understanding of its customers and knows which ones it has to keep, which ones it should keep and which ones it can afford to lose.

The Six Step method (see below) has helped managers with local marketing, says Smith. Activities are now consistent with the campaigns and messaging conveyed by the group’s central marketing function. “We had local managers targeting customers but too often they got it wrong. Two-thirds of our local investment in direct marketing was being wasted because the strategy was wrong at a local level.”

The Six Step programme means every part of Gala Coral’s business is focused on the customer’s journey when he or she interacts with one of the brands. It has generated a return on investment of up to 400% in the first year for some Coral.co.uk campaigns.

Smith says: “How we develop our products and who we target will be decided by our Siebel database, which drives everything.”

He claims the CRM strategy is so effective because it is based around a customer’s lifetime loyalty. The technology and different media are being maximised at each key touchpoint, driving customer loyalty and profit across the group.

He says: “We have a strategy based around relevance and behaviour that works in a multichannel environment. We can now find the right

Gala Coral’s Six Steps

STEP ONE
The nursery programme
Gala Coral head of group customer relationship management Antony Smith believes brands make the mistake of trying to get money off new customers and cross-sell to them too quickly. Gala Coral has found that service-led messages explaining added-value benefits help to reassure customers.

“Now we understand the importance of lifetime value, rather than going for the hard sell, we have introduced simpler behavioural new-member programmes that focus on educating the customer about our services,” says Smith. “On the Coral.co.uk website, for instance, we publish telephone support numbers alongside the long-term benefits of the account. The tone of the communication also varies depending on what we know personally about each customer.”

New customers are nurtured within the nursery programme for 28 days and behavioural data is used to advise Coral on when to start cross-selling. In the past year, there has been a 10% increase in the number of deposits made on Coral.co.uk.

STEP TWO
The core retention programme
Once a customer has interacted with the brand enough times over a certain period (three visits in 90 days to a Gala Bingo site) the aim is to retain them and ensure they remain active.

For Galabingo.com, individual messaging around the games a customer prefers to play and the amount they usually spend is linked to how they respond to particular promotional offers. All this activity is based on how they have behaved in the past.

The result has been a significant increase in customers using more than one product, with some campaigns doubling click-through and return on investment in a year. “This programme is highly targeted, with strong support for our best customers,” says Smith.

In the Gala Casinos, the data is used to ensure the most profitable customers are looked after well. He explains/ “There is a lot of hospitality for people who have a high disposable income and a high inclination to gamble, so the CRM approach here has to be about more than offering money-off or extra bets. It is about making sure they enjoy their experience with the brand.”

STEP THREE
Dippers’ programme
When a customer’s involvement with the Gala Coral brands starts to dip, the marketers can use the Siebel database to target him or her in a relevant way again based on the individual’s previous behaviour to re-energise their enthusiasm.

In the retail casinos, recent activity focused on the slot machines and electronic games where players’ interest was dipping. Data drove the CRM model by identifying which customers were slowing down their pace of play. Being able to do this meant response rates to promotions were twice as effective as those run by waiting until these customers had lapsed.

STEP FOUR
Lapsed programme
A campaign for Gala Bingo Retail was focused on reactivating customers using a series of vouchers after the traditional Christmas and New Year slowdown.

Data has driven two important insights for the marketing team. It has identified which customers really respond profitably to the vouchers and which customer segments were going to come back anyway.

This has reduced re-run costs by half. “We have a responsibility not to entice customers to spend money they don’t have, so we need to know why they have lapsed. By looking at their average spend and visits over a period of time, we can tell whether it might be, for example, a temporary budgeting issue,” says Smith. “Data means we know how individuals respond to offers so we don’t keep increasing the richness of an offer to an individual when we don’t need to.”

STEP FIVE
Rehabilitation programme
Reminding people of the benefits of why they interacted with a particular brand in the first place is crucial to ensuring they do not lapse again and their previous behaviour returns.

For Gala Casinos, the company takes information about the games the customers prefer and data from the points-based Fortune loyalty card scheme to create tailored incentives based on the level of spending a customer had demonstrated before they lapsed. The return on investment has proved four times greater than that for previous lapsed campaigns.

STEP SIX
Long-term lapsed
Smith says an effective lapsed campaign must be relevant to the gambling products a customer was using before they left. Any strategy to bring consumers back must also take into account that some customers will always lapse.

“There are many Coral customers who only gamble once a year on the Grand National or make social bets around the X-Factor. Data will tell us who these people are and remind us to send them an offer around the anniversary of a particular betting event,” says Smith.
“If they redeem the offer, we will then put them into the ’rehabilitation’ pot, rather than regard them as active customers again.”

For Galabingo.com, the customers considered long-term lapsed (more than one year since they played) are targeted with offers around the anniversary of their last or first deposits. The extra level of data means the campaigns are relevant to the recipients and there is a 20% uplift on reactivations.

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