How to enable AI-powered 1:1 marketing
As part of the AI for Marketing course, I answered this very question, using Libero, a leading diaper brand, as a case study.
AI Retention Campaign for 'Libero'
Introduction:
Libero sell diapers of all sizes (age / kg brackets) at different pricing points (some premium offerings + different fits). They are a node because they sell through grocery stores and other channel partner stores. Their website (in Norway at least) only points to other stores that sell their diapers. This and the fact that I recently became a recurring customer led me to choose this brand.
AI-Powered Marketing Campaign:
The campaign will be focused on retention. Libero will launch Libero Go, a direct-to-consumer subscription service with premium diapers at an affordable price.
Based on the age, amount, weight and preferred diaper fit (closed pant vs open), average diapers used per kid, AI will suggest the optimal subscription for each customer, and make recommendations as behavior changes and kids grow.
The channel partners will be entry points for the subscription service. They will still play a key role in the existing distribution strategy, and they will also drive adoption of subscriptions through selling diaper packs with QR codes on them that incentivize starting a subscription (always have the best diapers handy at the best price + free returns / exchanges with any channel partner store). The diaper packs sold through these channels will also contain extra free premium diapers with QR codes that lead to generous subscription deals.
Identify the Data:
Based on the current business model and some very quick research, I know that Libero has the following data:
Channel Partner Data (Third-Party, not directly about consumers):
● Revenue and amount sold by diaper type/size, geography, and partner store
Customer Club Data (First-Party, directly about consumers):
● Customer contact details
● If someone has a baby
● If someone is pregnant
● If someone wants a baby
● How old the kids are (if any)
● Diapers they usually buy and frequency (any time the customer registers a pack bought from a channel partner to get loyalty points)
Propose a New Business Model:
My proposed business model is to add the Libero Go subscription service targeting consumers directly instead of only selling through channel partners.
This way they will have ownership of the customer relationship, which gives them more complete data to make personalized recommendations that improve over time due to network effects.
The customer club data combined with the sales data from partners will be the foundation for subscription recommendations. Recommendations will only improve with time as more customers use and stick to the service over many years and diaper sizes.
Libero should keep working with channel partners for general awareness, subscription business awareness and additional revenue (+ accepting exchanges), but focus on growing the subscription service.
The business model and campaign are synonymous, as you can not do the campaign without first-party data and direct transactional relationships with customers.