BP CRM Pilot Fuelled by smartFOCUS

BP is a FSTE100 company serving around 13 million customers every day through 28,500 retail outlets in more than 100 countries across six continents. It was founded as the Anglo Persian Oil Company by William

Knox D'Arcy in 1909 and employs 100,000 people. Customer

Introduction

BP has four brand values that underpin everything they do:

Performance - setting global standardsInnovative - delivering breakthrough solutionsProgressive - always looking for a new and better approachGreen - demonstrating environmental leadership

BP aspires to be one of the world's great companies, with a sustainable long term future. This is captured by the phrase ‘beyond petroleum', reflecting their brand positioning today and their aspiration to meet the world's future energy needs.

In the UK they operate circa 1,300 Petrol Station Sites, of which, 40% are owned by BP.

The Challenge

BP’s UK Retail Division has explored different CRM strategies in the past 10 years from tokens to branded loyalty cards. They were one of the founding partners of the Nectar Loyalty Scheme in September 2002. In 2005 decided to investigate how they could harness the full power of all their customer data from across the business to maximise scheme participation.

BP’s Retail Marketing team commissioned a pilot project with smartFOCUS to investigate the opportunity to gain greater advantage through better use of the data available. The desire for BP is to leverage their data to gain customer insights and to use this knowledge tobecome a more customer focussed organisation.

Given the complexity of the data flows between BP, its Point of Sale (POS) data supplier and its loyalty partner, BP Retail staff had no central marketing database and more importantly, no direct access to this data at BP.

smartFOCUS’ Managed Service Division, was appointed to build an analytical data mart from these various data sources and provide a managed service to host the data mart and update it on a monthly basis. In addition to the construction of the database they were to provide full analytical services to support BP in the execution of a Customer Driven CRM PilotCampaign based on knowledge and insight gleaned from analysis of the data.

The CRM Pilot Campaign

The objectives of the pilot campaign were to increase the average contribution per customer, decrease customer churn thus improving retention and increase the visit frequency to improve the share of wallet.

The pilot campaign devised was multi-channel, multi-offer and multi-stage. The communication channels used to deliver the offers included; a highly personalised Direct Smile® mailing piece, an Email and a Point of Sale offer comprising of voucher offers printed with the till receipt. Finally, the SMS channel was used to remind Customers about the offers that BP had made to them when they were in close proximity to pilot BP sites. Except for e-mail, all of these were new channels being tested by BP.

The primary goal of the campaign was to either reward customers based on their recent shopping behaviour or incentivise customers to try new products, or both. Customers were provided with offers such as free or half price items plus Nectar points for higher marginproducts like Ultimate Fuels, Car Washes and Wild Bean Café products including Lattes and Muffins.

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BP

Industry Sector

Petroleum & Chemicals

Solution

Modeling

Solution Components

Data Quality/Management

Single Customer View

Analysis & Visualization

Predictive Modeling

Campaign Management

Email Marketing

Online Execution

Performance Management

Managed Service

Cequity's end-to-end suite of integrated services includes customer management consulting, marketing database & information management solutions, analytics, metrics & dashboards and campaign measurement support. Our state-of-the-art technology solution, Cequity ACE is powered by smartFOCUS and is a hosted customer marketing system that can be quickly implemented without major hardware or software investments. This helps us deliver rich yet valuable, information-driven, customer experience opportunities for you.

“From our experience, the Intelligent Analytical Marketing from smartFOCUS makes it possible to instantly analyze, segment, identify and communicate with large volumes of customers and contacts on an individual basis. Intelligent Marketing improves customer communications - throughout the entire lifetime of a company-customer relationship and makes performance driven multi-channel marketing a reality. smartFOCUS is faster and more efficient than we thought it would be!”

CEO - Cequity Solutions

What we did

smartFOCUS delivered the CRM pilot project in four stages as follows;

1. Build the analytical data mart 2. Develop a suite of metrics to gain a better understanding of BP Nectar customers 3. Deliver the CRM pilot campaign, consisting:

Selection of sites for the pilot Selection of control sites Selection of target and control customers

4. Undertake post campaign analysis of the CRM pilot campaign results

The stages were delivered as a series of consultancy days consisting of workshops and onsite consultancy to ensure a complete knowledge transfer of the insights gained. Additionally, the analytical data mart was maintained and updated with regular updates from the different suppliers.

Stage 1 - Build the Analytical Data Mart “The customer

The first stage for smartFOCUS was to design and build the data mart to support analyticsand underpin the planned CRM pilot campaign. The key data forming the core of the system was the individual Nectar Card transaction data from all BP’s petrol station sites enhanced with Nectar Card registration information and BP’s product data from their SAP system. At the end of the this stage the high level metrics were as follows;

9m BP Nectar Account Registrations83m site visits (‘shopping baskets’)111m transactions

The analytical data mart, containing all the customer details, their transactions, BP Sites and Products was hosted on smartFOCUS’ infrastructure.

Stage 2 - Develop Customer Insight

Working in conjunction with BP, smartFOCUS Solutions Consultant implemented the bespoke segmentation solution developed for BP by LMUK and Pareto Works in smartFOCUS Viper. The segmentation was based on customer transactions over a six month period at BP Sites, taking into account the value of the transactions along with the frequency and regularity of the customers visits to BP sites. This yielded a seven segment solution of the ‘active’ customers into seven groups ranging from A-Loyal down to G-Visited only once.

The segmentation was then used as a basis for reporting on a number of customer metrics, including;

SpendContribution Number of visits to BP sitesTransaction behaviour e.g. Fuel only or shop and fuel

The segmentation was then updated on a monthly basis. This enabled BP to monitor and track customer movement between segments and track the performance of segments.

Stage 3 - Delivery of the CRM Pilot Campaign

The first task was to select the pilot sites. To ensure that this was impartial and maintained the integrity of the project, smartFOCUS used their MODELER application to ‘cluster’ BP’s Sites together into groups with similar characteristics. The four site groupings were thenreviewed and selections made for pilot and control sites that were representative and consistent with the overall groupings.

The campaign definition was created using the Campaigner application which utilised queries and entities already set-up in the data mart. The requirement was to select customers based on their shopping behaviour in the past 3 months at 35 pilot sites. The first split of thecustomers created 2 groups, one who had only purchased fuel and a second that had made both a fuel and shop transaction.

The fuel only customers were to get rewards based on their fuel purchase behaviour and incentive offers based on their propensity to purchase the pilot offer products; whilst the second group received either rewards for existing shopping behaviour or incentives to trialnew products for which they had a high propensity.

In total there were 12 main campaign cells splitting into 24 sub cellsacross the different contact channels, each receiving 2 or 3 individualoffers of reward or incentive.

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segmentation solutionimplemented bysmartFOCUS has enabled BP to quantify the value of their active customer base, to understand whichsegments are growing and gain an insight into customer transitions between the segments.”

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Stage 4 - Post Campaign Analysis

Following the successful delivery of the campaign, it was essential that the post campaign analysis allowed quantification of the objectives against the control groups. Having updated the data mart smartFOCUS provided a full analysis of the campaign results including measurement of the response against the stated objectives.

A full post campaign analysis report was delivered to BP Retail to conclude the project which identified some of the key successes and failures of the campaign for future Learning.

Adhoc Analysis

BP quickly recognised the value of having their own data mart incorporating data merged together that had previously remained in separate silo’s. It provided a great opportunity for the retail marketing team to answer some of the key questions that had until now remained impossible to answer. Therefore, in addition to the CRM project, BP commissioned a series of ad-hoc pieces of analysis to answer strategic and tactical questions framed by the business,such as;

Targeting for the re-launch of new formulation Ultimate FuelsSegment movement to understand how long Customers remain / persist in a particular SegmentCustomer sensitivity to fuel price changesWild Bean Café free latte offer promotionPerformance of new M&S Shop site formats

Results and Benefits

The work undertaken deploying smartFOCUS Viper software has allowed BP to gain a deeper understanding and insight of the shopping behaviour of their Nectar Card customers and value they deliver to BP. This will enable them to determine the value of being a member of the Nectar scheme and input into future strategy.

BP has benefited from the ability to obtain rapid answers to marketing questions by utilising both the flexibility and speed of the data mart allied with the service provided in the form of expert consultancy from smartFOCUS. This combination of skills and technology has enabled BP to deliver a highly complex and sophisticated CRM pilot campaign very cost effectively.

The customer segmentation solution implemented has enabled BP to quantify the value of their active customer base, to understand which segments are growing and gain an insight into customer transitions between the segments.

Key elements of the CRM pilot project has been delivered through interactive workshops and on-site consultancy thereby providing BP with a complete understanding of the processes and the data utilised within the project and allowing full knowledge transfer of the insights gained. Following the results and conclusion of this project, BP is now going to implement a globalCRM strategy adopting the lessons learnt in the pilot CRM campaign.

About smartFOCUSsmartFOCUS (LSE:STF) is a leading international marketing software company that empowers marketers with the intelligence to drive high performance multi channel campaigns and more valuable customer relationships. Its Intelligent Marketing solutions integrate off-line and on-line data, analysis, campaign and performance management to deliver better targeted more timely and relevant communications that increase campaign conversion rates and improve customer’s insight.

smartFOCUS now has over 300 customers worldwide using its marketing software including AAA, ABN AMRO, ATOS, Centreparcs, EMI, Fig Leaves, Harrods, Hilton International, NSPCC, Societe Generale and QVC.

In 2006 smartFOCUS experienced revenue growth of 52% to £9M. The organisation is headquartered in the UK, with offices in the US, continental Europe and Asia Pacific.

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Note: This is an ‘original paper’ by smartFOCUS. Cequity ACE is powered by

smartFOCUS and Cequity uses this distinguished technology to empower its end-to-end suite

of analytical marketing and customer relationship management solutions.