Pizza Hut has enjoyed 12 times return on ROI from customer engagement in the past year since it has used a new solution to target customers through mobile, social, and in-store.
Pizza Hut uses Capillary’s Customer Intelligence solution to incrementally capture, structure, and leverage large quantities of customer data. This solution enables Pizza Hut to break down its massive customer base into numerous clusters and micro-clusters based on expressed characteristics, purchase tendencies, and behavioral indicators. Resulting fact-based insights about each customer cluster is fed into Capillary’s Lifecycle Marketer solution whereby engagement programs are designed and deployed across thousands of targeted consumer engagement workflows using campaign automation.
The combination of solutions allows for seamless communication with Pizza Hut’s customers across all channels – in-stores, via tele-ordering and through Pizza Hut’s online portal, ensuring effective engagement no matter which channels customers choose.
Juliana Lim, Senior Marketing Director at Pizza Hut, told Loyalty 360 that Pizza Hut has a large and frequent customer base, and reaching out to them through direct marketing and traditional communication channels can be expensive and not necessarily effective.
“Customers have their own preferred channels of communication and their response affinity also varies highly across channels,” Lim explained. “With considerations of relevance, effectiveness and costs, Pizza Hut implemented a comprehensive targeted marketing program to deliver personalized promotions that will appeal to their customers. To get down to the personalized offers requires strong data analytics around customer behavior, adoption of consumer re-marketing and usage of multichannel real-time technology across mobile, social, and in-store media. The understanding on customers has allowed Pizza Hut to not only segment customers on the basis of their behaviors, but it’s also able to match the right media -- email, mobile, direct mail, web -- to the right customers resulting in better response to their usual offers.”
This approach has helped Pizza Hut gain incremental business.
“With knowledge of how and when a customer will make their next order, Pizza Hut can now prompt customers to order according to their needs and at the point where they are likely to consider a purchase, hence increasing incidence of impulse purchases,” Lim explained. “With data analytics, Pizza Hut is also able to identify new customers and use attractive and timely offers to persuade them to stay with the brand to broaden their total customer base. Customer segmentation models have become more refined as each customer now receives communications via channels to which they are most likely to respond. This has increased campaign hit rates, improved campaign ROI, and built customer brand loyalty all at the same time.”
Krishna Mehra, co-founder and Chief Technology Officer for Capillary Technologies, said Pizza Hut’s use of Capillary technologies has, for now, focused on India, Singapore, Hong Kong, Thailand, and Bahrain. He said Pizza Hut may use the technology in the U.S. at some point in the future.
“Pizza Hut has been one of our biggest success stories,” Mehra told Loyalty 360. “We did segmentation and wound up with 25-30 different segments. Then we analyzed behaviors and came up with an engagement plan called the Lifecycle Marketing Plan. It’s really taking marketing automation and applying it to a retail business through automatic cadence of communications at the right time. It’s really about understanding when consumers want to receive that communication.”
By using Capillary’s solutions, Pizza Hut has created 6,000+ customer behavioral groups, empowering the brand to predict future purchases and execute campaigns at preferred times via customers’ preferred engagement channels (direct mail, email, text message and more), yielding incremental sales growth across its restaurants and delivery business empowering.
The solutions have yielded:
A 200% jump in average campaign hit rates across customer segments
A 38% improvement in Pizza Hut’s customer retention rate
A 9% increase in customer visit/purchase frequency in just seven months, and
Up to 6% extra sales generated every month since the program was started.
Pizza Hut is the world’s largest pizza chain with over 12,500 restaurants across 91 countries.