April 30, 2021
How brand holding groups use customer data to compete
Brand holding companies have unique strengths and resources that help their subsidiaries become fierce competitors in the retail market. But there’s one resource that many holding companies have struggled to bring into action: Customer data. Here are 5 ways holding groups can tap into this incredible asset for genuine customer understanding and engagement.
A brand holding group’s combined strength provides its subsidiaries with competitive advantages they wouldn’t otherwise have access to—but each brand is only as strong as its relationship with customers.
By combining, enriching, and standardizing customer data with a Customer Data Platform (CDP) like Lexer, you can empower every brand in your group to provide the focused, personalized, and brand-specific experiences that their customers deserve. These exceptional experiences drive significant increases in profit and loyalty.
In this playbook, we’ll discuss the key benefits and use cases of customer data for brand holding groups, including:
- Understanding and growing customer lifetime value (CLV) across the brand portfolio.
- Managing the customer lifecycle across brands.
- Differentiating brands for more targeted and relevant communications.
- Centralizing operations to reduce costs and increase impact.
- Improving due diligence for new brand acquisitions.
5 ways holding groups can use customer data to improve outcomes across the brand portfolio
1. Understand and grow LTV across the brand portfolio.
Growing customer CLV is a crucial profit strategy for any brand.
Understanding a customer’s lifetime value across the entire portfolio requires you to not only aggregate their data from different channels and systems in each brand but also across the brands. By understanding how individual customers spend across the entire brand portfolio, you can unlock unique opportunities and use your scale as a competitive weapon for seizing those opportunities.
Many brands set constraints for customer acquisition cost or set minimum return-on-ad-spend (ROAS) goals. Often, these constraints require a positive return in the customer’s first transaction to ensure cash flow as they have little confidence in gaining a second order. An understanding of portfolio CLV can help you stretch these constraints for a greater competitive advantage.
For example, if you learn that a customer acquired on Brand A is highly likely to be cross-sold into Brand B, then you can be more bullish with acquisition costs, potentially losing money in the first transaction in order to maximize acquisition volume and ultimately outperforming your competitors.
Brand Collective, the apparel group whose brands include Clarks, Hush Puppies, Shoes & Sox, Superdry and Volley, did this using the Lexer CDP. Using the platform’s predictive analytics and advanced customer segmentation tools, the team at Brand Collective segmented customers by predicted LTV, profitability, and churn risk. Targeting lookalike segments with personalized acquisition campaigns led to:
- A 220% increase in ROAS.
- A 2x increase in new customer acquisition.
- A 5x increase in revenue from paid channels.
2. Manage the customer lifecycle across brands.
The customer lifecycle for holding groups is more complex and nuanced than that of individual brands.
People inhabit different customer personas as they grow and develop over time. A young, professional persona may later grow into a parent persona or a retiree persona as their lives change—and you’ll need to target them with different messaging, creative, and offers to stay relevant.
Understanding how customers live, evolve, and buy at both a brand and a group level helps you maximize growth for each. By following customers’ spending behaviors throughout their lives and targeting them at the right times across your brand portfolio, you can optimize your customer lifecycle targeting to drive the highest value.
For example, if your brand portfolio spans motherhood, household, apparel, and more, then you can create a customer lifecycle management strategy that cross-sells customers into new brands when they enter different stages of their lives. A woman newly acquired in the motherhood brand can later be sold into the household brand as they’re reorganizing and maintaining the home. Later still, you could sell them into an apparel brand as their children outgrow their old clothes.
Instead of losing customers to your competitors as they age out of individual brand offerings, you can retain their value at a group level by migrating them to subsidiaries that better meet their needs.
3. Differentiate brands for more meaningful customer engagement.
Paired with group-level customer lifecycle management, customer data helps differentiate individual brands to strengthen and clarify brand positioning.
Instead of positioning one brand to meet all of a customer’s needs throughout their lifetime, you can offer that customer a targeted and clearly-communicated value proposition from individual brands. By targeting specific customers with each brand, you can focus your brand offerings across the portfolio and communicate with as much relevancy as possible.
A CDP is a vital component of this strategy. By comparing the data between brands and enriching that data with third-party data sources like Experian’s Mosaic, you can make informed decisions about who the best customers for each brand are, how to speak to them, and where any overlaps or disparities in brand offerings lie.
4. Centralize operations to reduce costs and increase impact.
Without guidance at the group level, individual subsidiaries may struggle to implement effective and profitable strategies for customer engagement.
Instead of relying on individual brands to develop their own inconsistent operational models, consider centralizing high volumes of data from all your brands and creating a group-level team of operational excellence. With best practices implemented centrally, you can invest in higher-quality resources than an individual brand could afford and roll it out across all brands to maximize impact. This strategy reduces overall operational costs and improves performance across the brand portfolio.
For example, PAS Group, the Australian retail giant whose brands include Review, Jets, and Black Pepper, used the Lexer CDP to provide their central team with actionable insights about their customers. Using data as their guide, the team took action to develop powerful customer engagement strategies that drove remarkable results. Click here to learn how they used customer insights to reduce ad wastage, re-engage lapsed customers, and create amazing customer experiences for an 18x return on investment.
5. Improve due diligence for new brand acquisitions (and dispositions).
Acquiring or disposing of brands in your group is a major decision, one that should not be taken lightly.
To ensure you’re making the right decision for your group, you need to do your due diligence with real insights from real data—and that due diligence can be done more easily, thoroughly, and confidently with a centralized customer database for all of your brands.
With all of your data in one place, you can discover overlaps and disparities in customer data between brands. A CDP helps you answer questions like:
- Which brands in your group are over or under-performing?
- How has customer behavior changed over time?
- What is the relative profitability of different brands’ customers?
- How would a new brand’s customers compliment your existing portfolio companies?
- Which markets and customer segments represent an opportunity for growth?
With a genuine, in-depth understanding of the core customer of each brand in your holding group, you can make strategic acquisition and disposition decisions with greater confidence.
The #1 CDP for leading brand holding groups
As the CDP partner of choice for brand holding groups like Brand Collective, PAS Group, Boardriders, Village Roadshow Entertainment Group, Marquee Brands and more, Lexer has direct experience with the unique challenges holding groups face when it comes to deriving insights from data, making strategic decisions at both a brand and group level, and revolutionizing the customer experience in the retail industry.
We can help you tap into the full competitive value of your data by giving every brand access to:
- 360-degree customer profiles, enriched with Experian data, predictive attributes, and survey data.
- Easy-to-use tools to enable every team to self-serve customer insights.
- Flexible integrations for activating audiences and orchestrating relevant experiences across every channel and touchpoint.
- Customizable dashboards for sophisticated segment-level metric tracking and reporting.
- A talented support team offering strategic guidance from implementation to optimization.