Mini-case study – Euroffice segment Office supplies purchasers using ‘touch marketing funnel’ approach Euroffice (www.euroffice.co.uk) targets small and mid-sized companies. According to George Karibian, CEO, ‘getting the message across effectively required segmentation’ to engage different people in different ways. The office sector is fiercely competitive, with relatively little loyalty since company purchasers will often simply buy on price. However, targeted incentives can be used to reward or encourage buyers’ loyalty. Rather than manually developing campaigns for each segment which is time consuming, Euroffice mainly use an automated event-based targeting approach based on the system identifying the stage at which a consumer is in the lifecycle, i.e. how many products they have purchased and the types of product within their purchase history. Karibian calls this a ‘touch marketing funnel approach’ approach, i.e. the touch strategy is determined by customer segmentation and response. Three main groups of customers are identified in the lifecycle and these are broken down further according to purchase category. Also layered on this segmentation is breakdown into buyer type – are they a small home-user, an operations manager at a mid-size company or a purchasing manager at a larger company? Each will respond to different promotions. The first group, at the top of the funnel and the largest are ‘Group 1. Trial customers’ who have made one or two purchases. For the first group, Euroffice believe that creating impulse-buying through price-promotions is most important. These will be based on categories purchased in the past. The second group, ‘Group 2. The nursery’ have made three to eight purchases. A particular issue, as with many e-retailers is encouraging customers from the third to forth purchase, there is a more significant drop-out at this point which the company uses marketing to control. Karibian says: ‘When they get to group two, it’s about creating frequency of purchase to ensure they don’t forget you’. Euroffice sends a printed catalogue to Group 2 separately from their merchandise as a reminder about the company. The final group, ‘Group 3. Key accounts or ‘Crown Jewels’ have made nine or more orders. They also tend to have a higher basket value. ‘These people are the Crown Jewels’ and will spend an average of £135 per order compared to an average of £55 for trial customers’. They have a 90% probability of re-ordering within a six-month period. For this group, tools have been developed on the site to make it easier for them to shop. The intention is that these customers find these tools helps them in making their orders and they become reliant on, so achieving ‘soft lock-in’.