The North Face Analytics 50 Submission
The North Face
The North Face customers primarily purchase product once per year and do not come back every year to purchase additional product. With the company’s strong focus on winter jackets, ski jackets and warm fleece, customers of The North Face were purchasing what they needed to stay warm in winter but not much in spring or summer. The North Face realized that in order to build repeat customers, it needed to push beyond the traditional winter market, identify what other activities its customers were doing with the product, and create targeted marketing based on activity, not just purchase history.
The North Face focused on enhancing customer engagement and collecting additional data by creating a loyalty program: VIPeak Rewards. The program is designed for members to earn redeemable “PeakPoints” for every dollar spent and for participating in outdoor activities. Data from sales, web searches, event registrations, competitions, surveys and other sources is analyzed to build deeper, more meaningful relationships with fans of the brand. The company examined customer behavior data to understand the activity categories those customers were most interested in. Standard RFM analysis of past transactions was applied so top potential customers could be identified. Once top customers were identified, The North Face layered in activity data to create effective targeting based on what customers do, and not just what they buy.
The company’s efforts resulted in a dramatic increase in repeat and cross-category purchases, with the same customers buying from The North Face more than once. The North Face has been able to increase both the annual frequency of purchase and the year-over-year return purchase behavior of the VIPeak Rewards customers. In addition, the lessons learned with the top loyalty members are now being applied to nonmembers to identify top prospects across the whole direct-to-consumer base.