Overview

The challengesTo intelligently engage with customers at the optimal time with targeted & personalized marketing campaigns to increase customer order size, win-back lapsed customers, and launch a new product line.

The solutionBy implementing Capillary’s CEM solutions, Pizza Hut now has complete understanding of customer buying behaviors and preferences to enable customer segmentation and lifecycle marketing. The chain can now create automated but personalized campaigns to engage its customers in a more relevant manner.

The benefitsThrough customer segmentation and lifecycle marketing, Pizza Hut generated over $2 million in incremental sales in 18 months, realizing a 5% increase in sales. The brand also launched a new product line increasing purchase frequency by 28%.

Founded in 1958, Pizza Hut is a U.S. based global franchise and restaurant chain offering a wide variety of pizzas and Italian-style dishes. It is a subsidiary of Yum! Brands, which also has quick-service restaurants KFC, Taco Bell, A&W and Long John Silver under its marketing umbrella. Pizza Hut is the world’s largest pizza chain with over 12,500 restaurants across 91 countries.

Challenges As in any quick-service restaurant environment, Pizza Hut works to serve hundreds of thousands of customers with unique tastes, behaviors and consumption habits. The quick service restaurant industry is highly saturated and suffers from large discount margins, dominance of impulse buys and inconsistent repeat purchase behaviors.

Pizza hut realized the importance of engaging with consumers intelligently, and was looking for a solution that could accurately predict what each customer might want and allow the brand to engage with customers with the right offers, for the right meals, at the right times to reduce customer attrition and increase customer order value.

A Better SolutionTo address its challenges, Pizza Hut turned to Capillary Technologies for Customer Engagement Management (CEM) solutions that provide a 360° view of the customer’s multiple interactions across various channels enabling Pizza Hut to meaningfully engage with them. With complete insight into customer buying behaviors and preferences, the company can now deploy automated, targeted campaigns to reduce customer attrition and engage with customers at optimal times to generate additional sales.

Benefit 1: Customer Micro-Segmentation In a highly saturated market, Pizza Hut suffered from high discount margins to remain the leading Pizza restaurant chain. Serving millions of customers every day the company struggled to create a personal connection with each customer to enable brand stickiness.

Capillary’s Intelligent Customer Engagement Suite was used to cleanse, harmonize and segment Pizza Hut’s customer database. Customers were originally segmented into four high-level groupings based on buying behaviors and brand affinities. For added granularity, these four segments were divided further on the basis of preferred tastes, order patterns and tendencies to become inactive resulting in about 17,000 customer micro-segments. Personalized, targeted campaigns were created for each micro-segment allowing Pizza Hut to engage with customers intelligently, and create that personal connection with every individual. The result was a 38% increase in campaign response rate.

www.CapillaryTech.com 1

Pizza Hut achieves 5% increase in sales and successfully launches a new product line powered by customer analytics

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”Capillary has been our partner since November 2011. Using Capillary’s Intelligent CEM Solutions, we have been able to unlock insights from our database and offer targeted customer communication and offers to drive incremental sales growth for our delivery business.

Capillary’s analytical solutions have helped us to measure customer responsiveness to different product segments and associated repeat tendencies, enabling us to better design product-launch campaigns.”

Juliana Lim, Senior Marketing Director, Pizza Hut

Benefit 2: Increased response rate with Capillary’s Lifecycle Marketer Pizza Hut ran multiple campaigns at any given time so wanted to automate as much of the process as possible but without sacrificing the personalization or relevance of the communication.

Capillary’s Lifecycle Marketer enabled Pizza Hut to deploy thousands of personalized campaign variations to their diverse customer base each week, accelerating customer order value through relevant cross- and up-sell opportunities. The brand reaped the benefits with an increase of over 200% more customers responding to the lifecycle campaigns.

Pizza Hut now sees longer duration association with its brand, which helps the company to maintain profitability while reducing its need to invest in new customer acquisition activities.

Benefit 3: New product marketing Given the fiercely competitive nature of the quick-service-restaurant industry, Pizza Hut constantly seeks ways to delight its customers and give them the best product combinations at the best values to maintain its dominance in the industry. However, it has a very diverse global customer base and in the face of increasing competition, Pizza Hut wanted to increase its appeal to a wider demographic by introducing its new pasta product line.

Capillary worked with Pizza Hut to utilize insights from their customer database and promote the brand’s new pasta product line by understanding customer’s buying preferences and transaction histories. The insights were used to target specific customers segments that would best respond to its new line of pasta products. The insight-driven cross-sell program increased customer purchase frequency by 28% and has been expanded to Pizza Hut locations in 8 countries.

Capillary Technologies is a leading provider of cloud-based software solutions that help retailers of all sizes to engage intelligently with customers through in-store, mobile, social and email channels. Our platform powers end-to-end customer engagement, “clienteling,” loyalty and social CRM for more than 150 major brands in 10,000 retail locations. We help bring instant shopper gratification to 75+ million consumers in the US, UK, Middle East, South Africa and the Asia-Pacific region.

Visit www.CapillaryTech.com for more details. For queries and more information contact us at : info@capillarytech.com© Capillary Technologies, 2014 All Rights Reserved

2Case Study : Pizza Hut

The Products

Customer Intelligence Manager Campaign Manager Lifecycle Marketer

7%

2%1%

2%

1%

7.35%

2.48% 2.92% 2.49%

1.30%

9%

5% 5.2%5.7%

2.10%

High Loyal High Value Deal Seekers ValueConscious

One-Timers

Hit RateBulk SMS

Hit RateClustered

Hit RateLifecycle

Response rate improvement via lifecycle marketing

Only 4% of the total cost was incurred for Regular Lifecycle Campaigns which contributed to 41% of SSTG (Same Store Transaction Growth) indicating its high effectiveness

A 38% rise in test responders and 37% of test sales was observed with only 14% increase in number of messages sent