Paytronix Systems, Inc., a leading provider of reward program solutions to restaurants and retailers, Tuesday released the second brief in its Data Insights series, which explains that too often marketers swallow their profits with email campaigns that target “cannibals,” or guests who would have come in anyway. According to the Paytronix research, these blind campaigns inadvertently discount full price sales that would have happened without the offer and, consequently, drive down overall campaign profitability.

Part of the Paytronix Data Insights series “Extracting Customer Insights from Big Data,” the new research brief “Why Cannibals Are Killing Your Email Marketing ROI” explains why scientific customer segmentation and targeting is key to delivering highly profitable marketing campaigns.

Paytronix Data Insights advises marketers to segment customers into three categories: those who can be motivated to come in for an extra visit, those whose visit patterns are erratic or not yet established enough to predicting future behavior, and those who will predictively purchase with a simple reminder or none at all. Marketing to the third category runs the risk of cannibalizing full-priced sales because the customers would have happily paid full price.

To avoid cannibalizing sales and to increase email campaign profits, Paytronix Data Insights recommends that marketers:

  • Identify customers with the purchase via rewards programs, online ordering identification, reservation identification, credit card transactions, and more to shed light on a large proportion of guest past and predicted future behavior
  • Centralize customer data in one place
  • Segment, test, and modify campaigns
  • Approach each campaign with a hypothesis, test, then improve upon the status quo

“A discount invested in driving an extra visit from customers who would not have come in anyway was money well spent,” says Lee Barnes, head of Paytronix Data Insights. “This research helps our customers begin to identify what data and tools they need to segment, test and modify their campaigns, increasing the ROI of their email marketing through better understanding and engagement of their guests.”

Paytronix embraces Big Data, bringing together POS, loyalty, social media, and other disparate data sources to discover new opportunities for compelling visits and spending, efficiently identifying and automating 1-1 guest engagement. This report from the Paytronix Data Insights analyst research team is provided to help customers uncover actionable insights from disparate data sources, for more effective use of their marketing budget, which ultimately results in happier, more loyal guests.

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