Case Study: Launching Subscriptions in FMCG

In this case study, read how Mike Migliore stepped in at a global FMCG sports nutrition retailer to rescue their floundering subscription programme across both their brands and differentiate in a crowded market. Mike redefined the subscription proposition portfolio based on customer engagement and LTV; coordinated marketing teams for launch and ensured technology teams delivered on time, all the while keeping executive leadership and the board informed. 50% of subscribers were previously dormant customers, LTVs increased by 10% on average and retention was on target at 85%. 

Context: 

The world of sports nutrition is as competitive as sports themselves. Companies constantly innovate their products and marketing strategies to gain a competitive edge and secure their position in this dynamic market. CVG’s client was no exception; within an 18-month period, the retailer had undertaken a re-brand and baselined all prices to exceed those of their competitors, firmly planting themselves at the premium end of the market. As they expected, this reduced sales volume and frequency of purchase, but traditional marketing efforts were not growing sales as quickly as desired. 

Challenge: 

The executive leadership had committed that subscriptions would launch within the financial year to the board but, by the start of Q2, the business was no closer to defining what role subscriptions would play in reversing their declining sales volumes. Mike was brought onboard to (1) define how subscriptions would generate higher volume and revenues within the new brand identify; (2) upskill data and CRM teams on LTV and lifecycle marketing and (3) oversee the launch. 

The work:  

The client was working to a three-month timeline, during which a key board meeting would be held. 

Customer Analysis – Mike first set out to understand existing customer behaviour, working with the data team to: 

• Define LTV – choosing the right calculation and identifying the most meaningful and accurate way of identifying LTV amongst disparate customer groups 
• Understand customers in terms of profit and engagement  – Plotting customer profit against frequency and identifying any naturally occurring segments; identifying what proportion of customers delivers what proportion of profit 
• Segmentation and messaging review – re-examining existing segmentation and targeting frameworks; analysing current discount-led messaging on sales frequency 

Proposition Definition – Mike worked with the team to define a tiered proposition portfolio designed to increase purchase frequency whilst rewarding the most loyal customers. 

• Qualitative research – worked with the data team to survey customers and prospects to narrow proposition features and test options  
• Price sensitivity analysis – using Vanwestendorp and Gabor-Granger methods to determine price sensitivity for the new proposition portfolio 
• Supply chain approval – worked to ensure supply could meet demand for first six months of launch  

Customer Strategy – Mike worked with the team to articulate how the business could reverse the decline in sales and maintain premium market positioning by selling a tiered proposition portfolio, implementing outstanding content-driven CRM and more effectively managing the supply chain.  

• Introduced tiered proposition portfolio, including a paid for option with priority access and benefits. 
• Reviewed customer lifecycle and defined new contact strategies to manage tenure, frequency and value, along with new contact rules that were also GDPR compliant 
• Implemented new segmentation strategy based on engagement and value 
• Defined a content plan collaboratively across both brands and identified key brand partners for launch 
• Worked with marketing leadership to define the GTM plan for launch across performance marketing, trading, CRM and supply 

Growth Forecasting and Business Case -- Mike worked with the commercial and data teams to define the value of the new proposition portfolio and customer marketing strategy before aligning the benefit to existing growth targets. Mike also worked with the executive leadership to secure key budget to drive the GTM plan and additional technology development work. 

X-Team Design and Management – Mike led the cross-functional team to launch, keeping tight governance on each key member of the team and their respective deliverables. 

Results and KPIs 

• Subscriptions to launch on-time and on-budget – Completed 
• Subscriptions to renegage 20% of dormant customers – Exceeded at 50%  
• LTVs increase by 8% - Exceeded at 10% 
• Retention to be 80% or higher – Exceeded at 85% 
• Clear strategy for increasing customer purchase frequency and rewarding existing customers – Completed 
• Data and CRM team upskilled on LTV calculation, Whale Curves and lifecycle best practice – Completed 

Mike’s expertise in customer value management and strategic vision breathed new life into the FMCG sports nutrition retailer's subscription program. Through data-driven insights and customer-centric initiatives, Mike not only reversed the program's decline but also transformed it into a thriving revenue generator. This case study serves as a testament to the power of strategic customer value management in driving business success and building long-lasting customer loyalty.