Pizza Hut Slices Customer Base with Segmentation

Pizza Hut is the world's largest pizza chain, with more than 12,500 restaurants in 91 countries. To remain relevant to its vast customer base, the company had to improve its approach to capturing, structuring, and leveraging its customer data. The company turned to Capillary Technologies, a provider of cloud software solutions to help businesses engage with customers through mobile, social, and in-store channels.

The restaurant and food delivery industry is saturated with organized retail brands, as well as single and independent outlets. High discount margins are prevalent, consumers are prone to impulse buys, and repeat business is difficult to predict, Anant Choubey, vice president of sales and marketing at Capillary Technologies, says.

"To tackle the increasing competition and difficult economic conditions, we help consumer brands transition from generic marketing campaigns aimed at wider populations to highly segmented, targeted ... campaigns leveraging the best that technology can provide," Choubey said in a prepared statement.

Capillary's Customer Intelligence solution enabled Pizza Hut to break down its customer base into clusters and micro clusters based on expressed characteristics, purchase tendencies, and other behavioral indicators gathered across several channels, including in-store interactions and online and telephone orders. The resulting insights were then fed into Capillary's Lifecycle Marketer solution, where engagement programs were designed and deployed across thousands of targeted consumer engagement work flows through campaign automation.

"We now run targeted campaigns built with intelligence around customers' preferred product categories, typical purchase times, and channels of choice. Analytics-driven offers lead to more effective responses among loyal and new users, and have generated higher sales returns for us," Juliana Lim, senior marketing director for Pizza Hut, said in a public statement. Pizza Hut also relies on Lifecycle Marketer to pre-emptively engage every customer to prompt future purchases and retain their loyalty.

Capillary's Lifecycle Marketer has created more than 6,000 customer behavioral groups for Pizza Hut, helping the brand predict future purchases and execute campaigns at the most opportune times through customers' preferred engagement channels.

Since implementing the solution in March 2013, Pizza Hut has noticed successive increases in campaign performance, sales, and overall customer experience with the brand. In comparison to Pizza Hut's former bulk promotions, automated life cycle marketing with personalization has yielded a 200 person jump in average campaign hit rates across customer segments, a 38 percent improvement in customer retention, and a 9 percent increase in customer visits and purchase frequency.

"We can now identify our customers' responsiveness to different product segments and their repeat purchase tendencies, enabling us to better design our customer engagement and product-launch campaigns,driving incremental sales and better marketing ROI," Lim said in a statement.

The Payoff

Since implementing Capillary Technologies' solutions, Pizza Hut has seen:

• average campaign hit rates grow by 200 percent across customer segments;
• customer retention rates improve by 38 percent;
• customer visit and purchase frequency grow by 9 percent in just seven months; and
• sales grow by 6 percent every month since the program was started.

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