Nathan Ansell, Director of Customer Loyalty for Marks & Spencer, will be speaking at this year’s Festival of Marketing.
Ahead of the London event on 4/5 October (see the agenda and book tickets here), I caught up with Nathan to talk about M&S’s approach to data and customer loyalty. Here’s what he had to say.
Econsultancy: How does M&S use customer data to inform strategy?
Nathan Ansell: M&S utilises a wide range of data. So as is the case with most retailers, we’ve got a vast amount on how our stores are performing, and how the departments within those stores are performing and so on.
But in addition to that – and where we might differ from other retailers – is that we’ve got access to very good customer-level insight based around behavioural, transactional and attitudinal data.
I suppose the key thing for me, and something I constantly talk about to the teams internally, is that it’s not about having lots of data. It is all about how you blend the different sources to be able to generate actionable insight, which then helps you make better decisions overall.
It’s also about understanding the whole customer experience. Finding out what customers think, feel, and do – and having a very clear view about what you want them to think, feel and do in the future. Then, working out what you can do to create that behavioural change, and tailoring communications accordingly.
E: What are some of the strategies M&S uses to encourage Sparks sign-ups?
NA: In the past 18 months, we’ve grown from having just launched the program to having 6 million members, and that’s happened pretty organically. What we’ve found is that friends and family tend to recommend the program to other people – and that drives about 30,000 sign ups a week.
We don’t feel like we need to waste time and energy attracting new customers into the Sparks program. What we believe is that by by doing a brilliant job to existing members, they’ll pass on the program to their friends and family.
So, I’d say enhancing value for members is where our primary focus lies, as opposed to sign ups.
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E: What results have you seen since the launch of the loyalty program in terms of wider business effects?
NA: Sparks has certainly generated a degree of emotional loyalty to Marks and Spencer – the customers who are most engaged with the program feel like they are part of a special club. That’s important.
However, it’s also driven some quite big behavioural changes, too. We’re seeing customers come to shop with us more often, so we’re driving a frequency of behaviour which is key to growth. But more importantly, as a business that expands across multiple areas – including homeware, clothing, and food – we’re also seeing customers shop across categories.
What’s also significant is that a lot of this is being seen in terms of full-price rather than discounted sales. This is because people are discovering items that weren’t so ‘top-of-mind’ before. Now, they’re coming in and exploring more diverse ranges – and ultimately shopping more often.
E: How much do you value personalisation when it comes to furthering customer loyalty?
NA: Personalisation is critical for us. When we send out a quarterly statement to 6 million people, no more than two or three of those would be the same. The degree to which we personalise our communication is currently quite high, and there’s still more that we believe we can do.
The important thing is that it’s not personalisation for personalisation’s sake. It’s become a bit of a buzzword, for sure, so what’s it’s really about is taking every element of the customer experience – whether that’s the website, the app, or what happens when someone calls the call centre – and making sure it is optimised for that individual customer (and their individual mission) over a period of time.
E: What do you think truly drives customer’s loyalty to M&S?
NA: I think heritage is an important support factor, but the primary reason customers choose Marks & Spencer is always quality. And I think particularly more so when the economy is a little bit tough, actually. Customers want to invest in clothing that’s going to last – buy fruit that’s going to stay fresh in the fruit bowl for a longer period of time.
Instead of straight-up value, M&S delivers on the promise of money being spent wisely. Quality is the backbone of what we do.
There are other reasons of course. In Food, one of our key insights is that customers look to us as an exciting place to shop as opposed to your average supermarket, whereby it feels like more of a necessity. In contrast, shopping with M&S for food is more of an interesting and exciting experience, driven by things like our premium products, consistent new-in items, and lifestyle-driven ranges such as ‘Dine In for £10’.
In clothing, we think ‘fit and flatter’ is particularly important. That means having clothing that is high quality but also comfortable and fits well. This being consistent across all parts of the store is something that we’re working very hard on, and something that historically we haven’t always done well enough – but we’ve made steps on this more recently.
E: Do you see younger customers shopping more or less in certain categories?
NA: Interestingly, our customer base is much more evenly spread than some people might think. It’s true that our older customers tend to shop with us a bit more frequently and therefore have a higher spend, but actually we have a lot of younger customers coming through the door – particularly in categories like food and lingerie.
One of the key things we think about with Sparks is how we can encourage people who might spend a little less is one category to stretch their spend elsewhere. For example, with a younger lingerie shopper – the question is how do we encourage them to shop for dresses? That’s part of the ongoing journey.
We work very closely with Rosie Huntington-Whiteley, who has her own lingerie range. But she’s also just launched a successful swimwear range that in fact appeals to a very broad demographic. In this sense, we think the values of quality, fit & flatter, and style as being age agnostic – they’re appropriate and appeal to customers of lots of different ages.
E: To what extent and how does M&S promote its wider product range (clothing & homeware) to people who are currently only Food customers?
NA: Sparks is primarily a thank you for customer’s loyalty, but within that we do have offers and promotions – what we call ‘try this’.
So we look for product ranges across categories that, based on a customer’s profile, we think they might want to buy into. If you come in regularly to buy shoes, but you’ve never bought anything from our nightwear range – we’ll promote an offer in that category if we think you might like it.
We’re getting a lot of benefits from introducing customers to parts of the store they might not have previously thought to look at.
E: What’s the next big priority for M&S’s loyalty team?
NA: The Sparks program has got off to a pretty good start in terms of numbers, but we’re always learning. Sparks is something we’re continuously looking to improve and evolve.
The first and main objective is improving the program for customers, and making sure Sparks is something that’s really valued.
Secondly, for us, it’s using Sparks to get to know our customers better, so that we’re continuously learning about customer preferences, how best to contact people, and using these insights to help targeting.
Our final priority is sharing the data we get from Sparks across all areas of the business, and learning how it can enable everyone to do a better job – and that’s something we’re always working on.
Buy your tickets to hear more from M&S and many other big brands at the Festival of Marketing 2017