Exploiting Inactive Customer Potential
CHANNEL21 is Germany’s third-largest home shopping station and can be received in 95 % of all TV households. Six million customers enjoy the retailer’s full range of products, including fashion, beauty, health, jewelry, household goods, and electronics.
The retailer had steadily been generating a large number of new customers via TV. However, of the one million new customers, only 100.000 to 200.000 became regular customers. Since customer acquisition through the operation of the TV station is very expensive, the CRM department of CHANNEL21 wanted to make better use of the inactive customer potential.
Reactivation: Identifying The Probability of Future Purchases
For its advertising activities, mostly via print mailings, CHANNEL21 previously selected large customer segments based on traditional RFM criteria. These campaigns generated high costs, which were offset by an uncertain return.
With the CrossEngage Model Builder, CHANNEL21 created predictive models for the purchase probabilities and contribution margins of all customers with little effort and without IT, and thus determined those who were really worth the advertising effort.
RFM Criteria vs. Predictive Modeling by CrossEngage
The results of the previous customer selection were to be directly compared with the new prediction methodology by CrossEngage. In the longer term, surprising results showed up:
Seven-Figure Increase in Sales
The segment selected by CrossEngage generated seven-figure additional sales.
Six-Figure Additional Profit
After deducting variable costs, the CrossEngage segment realized an additional six-figure profit.
“CrossEngage simply delivers more sales and revenue per customer!“
– Klaus Skripalle, Managing Director CHANNEL21