Direct Wines

Company: SPSSCustomer: Direct WinesSubmitted by: Lewis PRDirect Wines is working with SPSS to reach customers with specialised offers. The use of SPSS software is helping Direct Wines to build on its existing database, and help to personalise customer offers more efficiently.

Direct Wines is the world’s largest mail order wine company, celebrating its 30th anniversary last year, from a humble start as a single shop in Windsor. Direct Wines now runs a variety of wine clubs, including the Sunday Times wine club, the Bordeaux wine club and various other clubs with business partners and charities. The company turns over £132 million a year.The company has grown significantly over the last few years, even faster than the market for wine, and now sends out 500,000 mailings a month. As a result, the membership database has dramatically increased in size too.

Direct Wines is an experienced database user, having first installed a solution fifteen years ago. As the company grew, it started to segment its customers rather than blanket mail the whole database. For instance, it would offer red wine to customers it already knew had bought red wine in the past. While the segmentation was fairly superficial at this time, the resulting pressure on systems was huge and information could either not be extracted or took too long to extract. The existing systems cold also not cope with the volume and number of mailings which had started at 25 per year but now stand at 80 and rising.

Six years ago, with 200,000 customers on its database, Direct Wines decided to review both its systems and the software running on them “We were running an SOP system running on a database called UniData. As Direct Wines began to grow it needed to increase the segmentation of its customers in order to drive its growth even higher,” explains Jon White, customer database analyst for Direct Wines.”It also needed the ability to analyse the results of the various creative and product tests that were becoming a regular occurrence. Creating multiple UniData Queries for mailing selection was time consuming and the complexity that could be accomplished was severely limiting. Analysis of sales was better, but still basic.”Direct Wines searched the market for marketing software and looked at most of the major solutions, including SAS, SPSS and Business Objects.

According to Jon White, “We were looking for a huge leap in function and greater flexibility to do the things we wanted to do without being dictated to by the limitations of the system. We also wanted a system that would be user friendly, not too statistical, so that non-expert users could take advantage of it.Not only was Direct Wines issuing more mailings than ever before, but the methods of contact were changing. In addition to conventional postal mailings, calls are made direct to customers from the company’s call centre in Theale as well as emails direct to customers who prefer this method of communication. As a result, within a single mailing, there can be as many as 70 different compositions, particularly when material from business partners is added.Direct Wines has a server running SPSS server and three workstations running SPSS Client.

SPSS is also used as the data retrieval system taking data from an Oracle database. Direct Wines was clear that SPSS met all the necessary criteria. “We could not have grown as a company without SPSS,” White explains.Direct Wines is also impressed at the added functionality in each new version of SPSS. “Each new version is always better than the last,” explains White. It started with Version 6.

0 and Direct Wines is currently using Version 10.0. It has also recently installed the Server version running on Windows NT. The move has given Direct Wines a massive leap in analysis capabilities and the speed at which they can be run. White reports, “SPSS Server is much much faster and gives more time to focus on strategy rather than the analysis. The speed of data manipulation, sorting, aggregating and matching is very high.

We can run a command and see the results almost immediately. This means that we can meet the marketing department’s needs quickly and capitalise on a business opportunity as soon as it appears.”With so many mailings now going out, reporting has become critical to determine how successful each campaign is. Traditional metrics such as response rate are no longer sufficient, but even when these are required, the old systems could not report quickly. Now, Direct Wines can report not just on response but on order value which in turn determines profitability per customer. It can also make comparisons between campaigns to determine the most effective way to reach customers.

White explains how this is done, “With SPSS, we can use our own data as well as external research to determine sales patterns so that each mailing we do is backed by evidence of previous success.””At first sight, SPSS has an interface with many different statistics options and transformation tools,” White adds. “However, the speed of its transformations and manipulation is staggering, and its ability to store syntax and scripts allows analysis to be repeated many times with ease.”The SPSS solution has also become critical as Direct Wines has moved into selling through new channels. It launched its bordeauxdirect.co.

uk site in November 1999 and the sundaytimeswineclub.co.uk site in January 2000. This will lead to new types of segmenting so that each customer is dealt with in the way that they would prefer. For instance, customers who welcome email need no longer receive mailings if that is their preference. The impact has been small so far, but we can see benefits in terms of reach.

We are also in a position to interact with our customers while a mailing is one-sided.”

Benefits

• Improved response to mailings through more accurate segmentation
• Increase customer value with targeted cross-selling, marketing and loyalty programsImproved focus on customer service
• Delivery of personalised interactions and consistent customer experiences across call centre, direct marketing and Internet
• More accurate and immediate reporting leading to deeper understanding of customers

Tech spec

• Sales Order Processing GTX SOP system on Oracle 7 on HP Unix
• MDB 3 SPSS client licences running SPSS Server on a Compaq dual PIII600, 512Mb RAM, 68Gb HDD
• Workstations dual PII400, PIII533, PIII733
• ODBC links from SPSS client and SPSS server