How to give customer connections a makeover

How do you reach and retain customers to grow your brand? Simple. Give customers what they want, not what you think they want. Cosmetic and nutritional supplement company FANCL is doing just that.

With an expanding customer base, one of FANCL’s most important sales channels is its e-commerce site, FANCL Online. The site has more than 3 million registered users, and more than 1 million of these users have requested information from the company, which FANCL provides in the form of an e-magazine.

“Distributing information in an e-magazine is an effective marketing tool,” says Hirokazu Sano, General Manager of the Online Sales Division. “But if you’re just sending the same content to everyone, its effectiveness is limited. What we needed was not an e-magazine that contained information we thought we should send out, but one that delivered the information our customers actually wanted.”

At the time, FANCL only used customer segmentation. Customers were divided into four segments based on major products purchased, and customization was limited to practices such as including different inserts.

“But you can’t call that one-to-one marketing,” Sano says. “Just extracting and segmenting the huge volume of data was a mammoth task. We were only managing three or four issues a month, and we couldn’t send information out with the timing our customers wanted.”

FANCL was looking for a way to combine its sales data, web log data and e-magazine open-rate histories to send emails tailored to customer behavior.

One-to-one marketing, elevated

Initially, FANCL was looking to adopt an email marketing tool. Having considered a number of systems, the company realized it needed a solution that offered flexibility beyond single channels. The way businesses look at data changes over time. While a solution might be excellent when it’s adopted, if it can’t evolve to suit changing business needs, it won’t be useful for long. So FANCL began evaluating marketing automation solutions.

“SAS Marketing Automation allows us to verify the results of approaching customers via the e-magazine and adjust our approach based on hypotheses,” explains Sano. “This method, based on rapid PDCA [plan, do, check, adjust], was just what we had been looking for. We realized this solution could do everything we needed and decided to adopt it.”

In addition to the flexibility and versatility, FANCL was impressed by the high degree of freedom SAS Marketing Automation offered and the fact that it could incorporate data it already had, including access logs.

Takaaki Hasegawa, Manager of the Online Management Group, supervised the deployment of SAS. The project involved linking three key systems: the mission-critical operational data system, the access log analysis system and SAS. It also involved deploying SAS Marketing Automation on a public cloud service, Amazon Web Services, for the first time.

This deployment combination allows for quick results to be derived from large data volumes hosted in the cloud, minimizing down time while maximizing security.

E-magazine open rates twice as high as predicted

FANCL began creating marketing campaigns based on detailed analysis of customer data. The result? E-magazine open rates were twice as high as those FANCL anticipated. Additionally, customer response rates have remained at the higher level since the system entered service.

The range of campaigns for action based on customer behavior is gradually expanding. In addition to the scenarios prepared at the start, FANCL now operates more than 10 additional campaigns within four major categories:

• Follow-up, which involves providing information to customers..
  
• Dormant customer, aimed at customers who have not made a purchase for some time.
  
• Cross-sell/up-sell, where customers are encouraged to purchase a product again or additional related products – at appropriate time intervals – based on the purchasing cycle, which differs for each product.
  
• Cart abandonment, where customers are reminded that they have unpurchased products remaining in their shopping carts.

“We were surprised to find the cart abandonment rate was far higher than we’d expected,” says Hasegawa. “In many cases when we sent those customers a reminder email, they revisited their online shopping carts and purchased the products. So this form of communication created more sales opportunities. And all of this was made possible because SAS linked our existing web log access analysis, operational data system and other source data systems.”

Looking ahead, FANCL plans to introduce and encourage more online reviews as well as personalized portal pages, using SAS.