Objectives, Messages, and Incentives

1. S
Objectives, Messages and Incentives
Abby Rudd
Anchie Chen
Jane Flis
Prakarsh Gupta

2. The Popcorn
Factory
• Founded in 1979
• “Specialize[s] in fresh-
popped popcorn in a variety
of exclusively designed tins
and packaging…”
• “Provides crowd-pleasing
gifts and great-tasting
snacks…”
• Online purchasing platform
• Part of the 1-800-Flowers
Family of Brands

3. Business
Problem
• The Popcorn Factory is
experiencing declining
revenues of -8.7% over
the two-year period
contained in the database.
$4.30
$4.40
$4.50
$4.60
$4.70
$4.80
$4.90
$5.00
$5.10
Year 1 Year 2
Millions
Revenues
-8.7%

4. Overview of
B2B vs. B2C Customers
B2B Customers
Number of
Customers
6,195
Average Length
of Relationship
311.74 weeks
Average
Recency
56.98 weeks
Average
Frequency
2.22
Average
Revenue Per
Customer
$389.35
Total Revenue $2,399,949.36
B2C Customers
Number of
Customers
93,805
Average Length
of Relationship
170.78 weeks
Average
Recency
56.04 weeks
Average
Frequency
1.65
Average
Revenue Per
Customer
$76.38
Total Revenue $7,138,255.84

5. Marketing Objective
S The marketing objective is to increase the Popcorn
Factory’s revenue by 5% in the next four quarters.
S Current (Year 2) Revenues – $4,551,996.66
S Desired (Year 3) Revenues – $4,779,699.86

6. S
B2B Cluster Analysis
Review
We selected our target segments from the cluster
analysis we completed. The cluster analysis
segments allow us to find more nuanced
information about our customers based on
commonalities among customers as opposed to
commonalities among variables (revenue and
recency).
The following slides provide a review of our cluster
analysis.

7. B2B Cluster Breakdown

8. B2B Clusters
Year-Over-Year Change in
Revenue
2012 vs. 2013
• Declining Revenue
• Cluster 1 – -95%
• Cluster 4 – -66%
• Top Performers – -
8%
• Increasing Revenue
• Cluster 2 – 235%
• Cluster 3 – 61%
• 2014 revenue is not for
full year
Top
Performers

9. B2B Cluster Analysis
Summary
B2B 1 B2B 2 B2B 3 B2B 4 Top
Performers
Number of
Customers
796 2,306 1,490 1,553 19
Total Revenue $498,980.81 $181,263.56 $1,361,515.07 $82,941.29 $275,248.63
Average
Revenue
$626.86 $78.61 $913.77 $53.41 $14,486.77
Average
Recency
91.87 weeks 36.27 weeks 35.42 weeks 90.38 weeks 50.56 weeks
Type of
Customer
Inactive
Customer
Higher Value
Active
Customer
Lower Value
Active
Customer
Higher Value
Inactive
Customer
Lower Value
Top
Performers
Note Regarding ‘Summary of Clusters’ Chart
S Active Customers – Defined as a customer who last purchased in the time period less than the mean (57
weeks)
S Inactive Customers – Defined as a customer who last purchased in the time period greater than the mean
(57 weeks)
S Higher Value – Defined as a customer whose average revenue exceeds the average B2B customer
revenue ($389.35)

10. S
B2C Cluster Analysis
Review
We selected our target segments from the cluster
analysis we completed. The cluster analysis segments
allow us to find more nuanced information about our
customers based on commonalities among customers
as opposed to commonalities among variables
(revenue and recency).
The following slides provide a review of our cluster
analysis.

11. B2C Cluster Breakdown

12. B2C Clusters
Year-Over-Year Change in
Revenue
2012 vs. 2013
• Declining Revenue
• Cluster 2 – -53%
• Cluster 4 – -72%
• Increasing Revenue
• Cluster 1 – 174%
• Cluster 3 – 1095%
• Top Performers – 49%
• 2014 revenue is not for
full year
Top
Performers

13. B2C: Summary of Clusters
B2C 1 B2C 2 B2C 3 B2C 4 Top
Performers
Number of
Customers
24,022 21,981 34,501 12,903 53
Total Revenue $3,871,685.42 $602,583.43 $1,145,951.60 $1,383,849.11 $134,186.28
Average
Revenue
$161.17 $27.41 $33.22 $107.25 $2,531.82
Average
Recency
33.99 weeks 90.77 weeks 36.74 weeks 89.43 weeks 51.3 weeks
Type of
Customer
Active
Customer
Higher Value
Inactive
Customer
Lower Value
Active
Customer
Lower Value
Inactive
Customer
Higher Value
Top
Performers
Note Regarding ‘Summary of Clusters’ Chart
S Active Customers – Defined as a customer who last purchased in the time period less than the mean (56
weeks)
S Inactive Customers – Defined as a customer who last purchased in the time period greater than the
mean (56 weeks)
S Higher Value – Defined as a customer whose average revenue exceeds the average B2C customer
revenue ($76.38)

14. Target Markets
S B2B 1 – High Value Inactive Customers
S These customers have experienced declining revenues from
2012 to 2013; this is due to their inactivity with the company.
S It is believed that if these customers can be brought back to the
company that they can be just as, if not more, valuable than
before their hiatus.
S Goal: Bring these customers back; get them to purchase again.
S B2C 3 – Low Value Active Customers
S These customers have experienced revenue growth resulting
in 2013 revenues being 10 times those in 2012.
S It is believed that there is an opportunity to increase the
average spending of these active and newly acquired
customers.
S Goal: Get these customers to spend more.

15. Current (Years 1 and 2)
# of Customers 796
Average Order Amount $626.86
Average Amount Per Order $368.74
Frequency 1.7
Total Cumulative
Revenue
$2,399,949.36
Total Year 2 Revenue $1,039,282.07
Achieving the Marketing
Objective
Through B2B Customers
At End of Next Four Quarters
# of Customers 796
Average Order Amount $626.86
Average Amount Per Order $368.74
Frequency 1.96
Increase in Revenue $76,329.42
Total Cumulative
Revenue
$2,476,278.78
Total Year 2 Revenue $1,115,521.49
We will get 26% of B2B 1 customers to purchase one more time in the next
four quarters (one year), which increases the frequency for these 207
customers to 2.7.

16. Behavioral Objective
B2B 1
S Increase the frequency or purchases by one for at least
26% of B2B customers in Cluster 1 (796 customers) over
the next four quarters. Because the average revenue per
purchase for B2B Cluster 1 customers is $368.74, this
will yield an increase in revenue of $76,329.42

17. Communication Objective
B2B 1
S To increase by 10% the belief that gifting popcorn to your
clients/customers and your employees can increase your
business as measured by the company’s annual
customer survey.
S To high value inactive customers, the Popcorn Factory is
the leading provider of premium popcorn products that
offers the widest variety of corporate-gifting popcorn
arrangements because of the creative and custom
packaging designs, fresh ingredients, and variety of
flavors.

18. Message and Incentive
B2B 1
S Email campaign encouraging for customers to purchase
themed gifts (towers, popcorn, samplers) because B2B
customers purchase for events such as internal
meetings/celebrations, employee appreciation and holidays as
well as client-relationship maintenance.
S Promotional offer giving free shipping on purchases between
October and January (peak holiday season).
S Deliver promotional code with order confirmation guaranteeing
customers 10% off on purchases made within 30 days.

19. Current (Years 1 & 2)
# of Customers 34,501
Average Order Amount $33.22
Average Amount Per Order $25.55
Frequency 1.3
Total Revenue $7,138,255.84
Total Year 2 Revenue $3,512,714.59
Achieving the Marketing
Objective
Through B2C Customers
At End of Next Four Quarters
# of Customers 34,501
Average Order Amount $42.00
Average Amount Per Order $32.31
Frequency 1.3
Increase in Revenue $151,463.78
Total Cumulative
Revenue
$7,289,715.23
Total Year 2 Revenue $3,664,178.37
We will get 50% of B2C 3 customers to purchase one more time in the next four
quarters (one year), which increases average revenue for these 17,251
customers to .

20. Behavioral Objective
B2C 3
S Increase the total spending per customer by $8.78 for at
least 50% of B2C customers in Cluster 3 (17,251
customers) over the next four quarters, yielding an
increase in revenue of $151,463.78

21. Communication Objective
B2C 3
S To increase by 10% the belief that popcorn is the best gift
for special and everyday occasions as measured by the
company’s annual customer survey.
S To low value active customers, the Popcorn Factory is
the leading provider of premium popcorn products that
offers the widest variety of popcorn arrangements
because of the creative and custom packaging designs,
fresh ingredients, and variety of flavors.

22. Message and Incentive
B2C 3
S Promotional offer granting customers free shipping on
orders above $100.
S Free tin or packaging personalization on one item with
orders of $55 or more.
S His and hers bundles offered in the month of February
and promoted through email campaigns.
S Message: “Make every occasion a special occasion.”

23. Total Revenue - Years 1 & 2 + Next 4 Quarters
Total Revenue – Year 2 $4,551,996.66
B2B Revenue – Year 2 $1,039,282.07
B2C Revenue – Year 2 $3,512,714.59
Total Increase in Revenue – Next 4
Quarters
$227,793.20
B2B Revenue – Next 4 Quarters $76,329.42
B2C Revenue – Next 4 Quarters $151,463.78
Total Revenue $4,779,789.86
Achieving the Marketing
Objective
Percentage Increase
5% of Year 2 Revenue $227,599.83
4-Quarter Increase in Revenue Over Year
2
$227,793.20

24. Summary
Remarks
• Cluster analysis allowed us
to see the commonalities
among customers in each
cluster.
• Using this data, we were
able to establish different
behavioral (increasing
frequency or increasing
revenue), communication
objectives as well as
messages and incentives for
B2B 1 and B2C 3.
• By achieving these goals,
we can achieve our
marketing objective of
increasing revenue by 5%.