Tennis is an individual game, and tennis players have individual tastes when it comes to buying gear and apparel. For Houston-based Tennis Express, a specialty retailer of tennis equipment, apparel, footwear and accessories, segmenting customers in order to better meet their individual needs and tastes is shaping up to be a winning effort.
“Our customers are not interested in a general approach,” said Brad Blume, CEO of Tennis Express, which operates a 15,000-sq.-ft. flagship store at its Houston headquarters as well as an e-commerce site. “They want to hear about specific brands. We had been throwing everything we have at them.”
Segmentation for Success
Tennis Express had already begun searching for ways to segment its customer base to provide more customized offers when Capillary Technologies, provider of the retailer’s POS and ERP technology, reached out about customer segmentation in the late spring/early summer time period of this year.
“They know we’re always trying to find the latest, greatest technology to generate market share and offer something our competitors don’t,” said Blume.
Say it With Email
Tennis Express decided to initially focus on improving email blasts it sent to its customer base. The retailer manually provided Capillary with its customer data and after several rounds of analysis the vendor segmented customers into five categories: high loyal customers who often shopped and spent large sums, potential high loyal, explorers who shopped at Tennis Express and its competitors, fence sitters who hadn’t purchased in some time, and lapsed customers who hadn’t made a purchase in more than 11 months.
“We created campaigns with different offers and promotions for each group,” said Blume. “What would attract a fence-sitter compared to what would attract a lapsed shopper.”
Running test and control groups with its email blasts, Blume said Tennis Express found a sales lift in every customer segment. Since the initial segmented blasts, the retailer has collaborated with Capillary to segment customers even further by product category.
“For example, what’s the next likely product category somebody who has made a shoe purchase will buy?” said Blume. “People don’t purchase rackets often, but they purchase shoes more often.”
Looking ahead, Tennis Express hopes to replace its manual data transfer process to an FTP-based process where Capillary will collect customer data on a daily or weekly basis. The retailer also plans to use customer segmenting data in its store so associates can identify top customers and their individual preferences.