March 7, 2020
Village entertainment drives revenue and loyalty growth with Lexer (Part 2)
As one of Australia’s largest cinema chains, Village Entertainment is committed to providing the best experience possible to its customers. When they adopted the Lexer Customer Data Platform (CDP) three years ago and used their newly unified data to shift to a consumer-led strategy, they achieved record-breaking growth in revenue and loyalty program sign ups.
Since then, they’ve continued using Lexer and the holistic customer insights accessible within the CDP to drive both their short-term and long-term growth strategies. Now, they have a new win to celebrate: significant growth in online sales during their 10-week Christmas voucher and gift card campaign. Specifically, Village Entertainment’s online sales grew by 16% year-over-year, a huge result for retail.
We interviewed the team at Village Entertainment, including Stacey Kwijas, Marketing Manager, to learn the strategy they used to drive their online sales and, in turn, increase the lifetime value of their existing customer base.
“The highlight of this campaign was our Black Friday sale, which offered discounted Gold Class movie vouchers. The revenue generated off one item in just five days was equivalent to 8% of our total Christmas campaign revenue. By that point in the campaign, we’d already been in the market for Christmas for six weeks. It was great to know that there were still audience segments to engage and the market wasn’t completely exhausted.”
– Stacey Kwijas, Marketing Manager
Ben Murphy, Digital Marketing Manager, added to this sentiment: “Throughout the entire campaign, the conversion rate on our online gift shop was up over 7% year-on-year. Moreover, the key metrics relating to the performance of our paid media platforms all significantly outperformed last year’s campaign. This shows the impact of our bespoke audience segments being exposed to specific and relevant offers across our channels.”
Strengthening customer loyalty with data-driven insights
If you don’t understand your customers, you can’t engage them properly. That’s the guiding principle that Stacey and her team have used since they made the shift to a customer-centric business model.
By using historical data to develop benchmarks and goals, analysing their data to understand the difference in behaviour between high-value and low-value customers, and identifying opportunities for more personalised engagement tactics, they were able to develop a highly targeted Christmas campaign that resulted in substantial revenue growth.
Luckily for Village, the cinema industry is particularly well-positioned to adopt such data-driven strategies because of the sheer volume of data they receive on an ongoing basis.
“Despite the growth in popularity of streaming services, people still love the big screen experience. 2019 was our third biggest year on record,” says Ben. “Cinemas are one of the few entertainment offerings that people begin engaging with in childhood and continue into seniority. The constant transactional data allows us to get a sense of where people are in their lives.”
Once the team at Village Entertainment had integrated their disparate data into a single customer view within the Lexer platform, they had a wealth of clean, rich data that helped them understand key customer insights such as number of predicted orders, predicted lifetime spend, churn risk, and more. They learned:
- The average lifetime value for loyalty members is significantly greater than non-members, with loyalty members spending on average 194% more per annum than non-members.
- Members are 4.6x more likely to be a low churn risk than non-members.
- Members are 26x more likely to spend over $150 than non-members.
- 99% of customers with over 8 predicted orders are members.
These insights highlighted the strength of their loyalty program, which then drove their strategy for their Christmas campaign.
Hyper-personalised campaign drives 16% growth in online sales
“Our Christmas campaign runs for 10 weeks, which is a long time to sustain interest with our staff and our customers. However, it also generates around 45% of our gifting revenue for the year,” explains Stacey. “The more vouchers we can sell over those 10 weeks, the better we can sustain our business outside of the blockbuster period.”
One challenge Village Entertainment is facing is the decline of on-site voucher sales. Therefore, their goal for this campaign was to ensure that its online sales grew to cover this projected deficit.
To do so, Village Entertainment used Lexer to match specific offers to specific customer types to prevent churn, grow LTV, and increase order frequency. They created 11 different customer segments and sent them personalised offers. These offers ranged from low-value, highly-targeted to high-value and broad for special sales days like Black Friday.
“Since we had so many tactics planned to stimulate sales, our priority was to ensure that we weren’t cannibalising high-value products by serving our highest value segments discounted options,” explains Stacey. “We built multiple segments to ensure that high-value customers were offered premium products, while low-value, most-likely-to-churn customers were offered discount-driven vouchers just to get them back in the door.”
By the end of this series of targeted tactics, Village Entertainment’s Christmas campaign had grown their online sales by 16% year-over-year.
Driven by customer insights, Village Entertainment and Lexer continue to test, learn, and grow
At the time of writing, Village Entertainment has been actively using the Lexer CDP for about three years. With their systems, people, and processes united around the customer, Stacey and her team continue to analyse customer insights to offer better, more innovative cinema experiences.
“Lexer has allowed us to humanise our data, and that gives us a more personal relationship with our customers. We are more equipped to make data-driven decisions that ensure our customers continue to love the big-screen experience.”
– Nic Robin, GM Marketing
Like the team at Village Entertainment, your team can also cater to high-value audiences, build customer loyalty, and accelerate revenue growth with the Lexer CDP.