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An in-depth understanding of the customer can provide invaluable knowledge in a competitive industry. Since NetOnNet has been focusing on target group analysis, customer segmentation and personalized data-driven marketing, it has doubled customer club purchase conversions through improved communication.
While several players in the highly competitive electronics industry have in recent years struggled or even gone bankrupt, NetOnNet's business has gone in the opposite direction. Founded in 1999 purely as an e-commerce enterprise, the company today has 33 physical stores and over 900 employees in two countries, and in 2016 it recorded a turnover of SEK 5.1 billion.
One of the reasons why NetOnNet has been so successful is its focus on customer data as a basis for gaining an in-depth understanding of its customers. Data-driven target group analysis has paved the way for personalized communication with customer club members, which has led not only to an increase in customer satisfaction but also to more positive sales growth rates.
“As we grew, we realized how important it was for us to know our customers. At the same time, we understood that their demands in terms of receiving relevant, personalized communication had grown.”says Pär Gancarz, CRM Manager at NetOnNet.
Customer data enables personalized communication
Work on data-driven communication began with a customer target group analysis conducted with the help of Bisnode analyst Niklas Lindblom. The first step involved ensuring the quality of NetOnNet’s own customer data while drawing on as much background as possible in terms of customer insights.
In the next phase, Bisnode added their data in order to expand on these customer insights. Data relating to customers’ housing situation, interests, life stages and purchasing power allowed us to divide NetOnNet’s customers into six different segments, each with different motivating factors and purchasing patterns. These formed the basis for NetOnNet’s email communication with customer club members.
“In the case of our TV week promotions, for example, we directed our home cinema package offers to an older target group with greater purchasing power, while younger couples living in smaller apartments received completely different communications”
NetOnNet in numbers
- Opened 10 March 1999
- Group includes 33 stores
- Over 900 employees working for the company
- SEK 5.1 billion in turnover (2016)
This data-driven approach has therefore provided NetOnNet with important insights in terms of exactly which products customers are interested in and what their next purchase is likely to be. Once communication with customers was tailored accordingly, the results were immediate.
“If you look at the open rate, it’s gone up by over 100% compared to when we were providing all our customers with the same information. And if you look at purchase conversions, they’ve also doubled. We also see that Klubbhyllan members make more purchases on average and visit us more frequently,” says Gancarz.
Customer segmentation for smarter product development
In addition to communication with customer club members, Bisnode’s target group analysis and customer segmentation form the basis of NetOnNet’s product development. For example, if NetOnNet decide to launch their own range of barbecues, they already have a good idea of what customers are looking for.
How Bisnode helped NetOnNet
- Quality assurance and analysis of NetOnNet’s internal customer data
- Enhancement of NetOnNet’s customer datausing external data to provide richer customer profiles
- Target group analysis and segmentation of customers into six different target groups with different motivating factors
- Continual access to analytical competence for a period of two years while building the CRM strategy
“The kind of barbecue that customers choose to buy depends on, among other things, whether they have a balcony or a garden and how much money they’re able to spend. Instead of relying on a gut feeling, these days NetOnNet can use customer profile data to offer the right products,” says Lindblom.
The next step in offering data-driven, personalized communication is to customize content on www.netonnet.se so as to create a personalized experience. Together with Bisnode, NetOnNet is currently developing the homepage to customize it for every visitor.
“The idea is that every visitor to the site should enjoy a unique experience where we provide the right customer with the right products and the right information in the form of guides and tips. We think you can do a lot with data-driven communication, and I actually believe we’re one of the companies that can push it to its limits,” says Gancarz.