OfficeMax Data Mining Lets Customers Trigger Their Own Deals

If you buy a digital camera from OfficeMax but not a memory card, you'll get e-mail the following week with memory product recommendations and a 15-percent-off coupon. The Naperville, Ill., office products store excels at event-triggered communications, says managing partner Kelly Hlavinka of Colloquy, Alliance Data's loyalty consulting arm in Milford, Ohio. These event-triggered comms not only bring in sales, they reinforce the impression that OfficeMax pays attention to its customers' needs.

OfficeMax used market basket analyses from its MaxPerks loyalty program to figure out that 40 percent of camera shoppers buy memory, so walking out the door "with a digital camera in one hand and nothing else in the other" triggers a personalized mailing, Hlavinka says. Starting with a universe of 2,000 such "opportunities," OfficeMax marketers created 30 rules-based events to pick up sales they might otherwise have missed.

Retailers collect a lot of data, but many don't use it effectively. For example: Hlavinka ended a lifelong habit when convenience lured her to the gas pumps at a membership retailer. She had always bought brand-name gas, "mostly because Dad filled up at those types of stations." But nobody noticed when her weekly fill-up went elsewhere, she says in Penton's Chief Marketer e-newsletter. "Major GasCo doesn't seem to have missed me," she says.

Hlavinka's regular gas station could have used transactional data to flag her absence and send email or a postcard. A free car wash would have brought her back "early enough to stop a new habit from forming," she says.

Event-triggered communications should be standard practice if you sell "everyday-spend" items such as groceries or phone services, Hlavinka suggests. "Most companies already store the information needed to create a defection defense." Sweep your database for missed transactions, and assign a score that triggers targeted offers based on the customer's profitability. Major GasCo could send a gas-guzzling customer who goes missing a partner offer like free movie tickets, while smaller spenders get coffee with a fill-up in the next two weeks.