When Joyce Clyde Hall took the train to Kansas City in 1910, he couldn’t have imagined that the two boxes of postcards he carried with him would become the start-up inventory of what now is a $4.4 billion enterprise.

Hallmark cards, gifts and other products are sold in some 43,000 retail outlets in more than 100 countries, but it’s the 3,500 independently owned Hallmark Gold Crown stores and nearly 500 company-owned stores that offer the widest selection of products. Ensuring that these stores are supported with the most effective marketing materials is the responsibility of Jay T. Dittmann, vice president of marketing strategy for Hallmark.

Dittmann and his team work to target consumers with compelling marketing messages that are delivered at the right time and at an appropriate expense level. The goal, of course, is driving sales. “At corporate we provide insight that turns database information into marketing programs,” he says.

All Hallmark Gold Crown stores electronically transmit consumer sales data to Hallmark’s corporate data center nightly. Much of the data covers shoppers in Crown Rewards, a customer loyalty program in which members accumulate points for making purchases. About 14 million consumers participate in the program.

To develop marketing materials that will resonate with these customers, Dittmann and his team first must make sense of the 300 million lines of data collected over the past few years.

Like many retailers, Hallmark is confronting what Alexi Sarnevitz, senior director of retail strategy for Cary, N.C.-based SAS Institute, calls the “three C’s of retailing”: intensifying competition, the increasing importance of customer centricity and the complexity inherent in trying to tailor offers to customers.

One way to meet these challenges is to boost the company’s effectiveness at reaching consumers through Hallmark’s loyalty program and increasing their buying share. Additionally, Dittmann wants to be able to identify new ways to grow the business.

To reach these goals, Dittmann and his colleagues needed the assistance of a robust marketing analytics and business intelligence solution that could make sense of the data Hallmark had accumulated. In the past, extensive data movement and manipulation was required before it could be used to answer business questions.

For instance, someone on Dittmann’s team would download a file from the mainframe to a server and import it into Access. He or she would then use Excel to view and analyze the information. All together, the process could take several days.

Having used multiple SAS applications for nearly a decade, Hallmark chose that company’s Enterprise Intelligence Platform in 2007. Dittmann and his team use the BI application for querying and analyzing the success of past marketing campaigns.

The software helps identify which groups of consumers have responded to specific ads and promotions. Armed with that information, the analytics application within the platform uses predictive modeling to enable Hallmark to gain an understanding of how these consumers are likely to respond to future promotions.

“SAS is the enabler that lets us do the analysis work,” Dittmann says. The goal is to segment consumers based on their Hallmark shopping patterns. That data is combined with other customer information, such as whether they have children or spouses and if they’re purchasing cards for friends or family members. Hallmark then tries to reach the various segments with different versions of a communications piece.

Determining ROI
One challenge was identifying those consumers most likely to respond to specific promotions, such as for Mother’s Day: Reaching out to all 14 million Crown Rewards members with a mailed promotion would be expensive and a waste of marketing dollars. So Hallmark might send one version of a Mother’s Day marketing piece to older moms who are purchasing cards for their daughters, and another to young mothers with kids.

Dittmann and his team test and control the promotions by tracking results of different versions of each communication. “We can determine the return on investment with any marketing communication or e-mail,” he says.

Using SAS, Dittmann’s team can connect directly to sales information on the server and use the BI application to analyze it. “They grind through the analysis and are able to do that in less time than we used to,” he says. As a result, marketing analysts can review the information, develop the next round of questions or chase down a new angle, all within a matter of hours. Analysts also can look at information across multiple years, giving them insight into shifts and trends in the market.

The entire process has become more dynamic, particularly when compared to a series of separate requests. “It frees up time to be pro-active and dig deeper,” Sarnevitz says.

In addition to looking at historical shopping patterns, Dittmann and his team have used the SAS application to take a “longitudinal view” and analyze their marketing spending throughout the course of a year. The objective was to decide when and how often Hallmark should communicate with its customers. The research showed that Hallmark was overspending in January and at Easter and under-spending at Father’s Day.

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