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Charles de Gruchy, Monthly CRM meeting -- CRM GOALS, Aug2008

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Early in 2008 under the leadership of Barbara Canning Brown, Toys R Us began to shift customer marketing to becoming more customer centric and more integrated across marketing touchpoints. The real kickoff for this effort was in the August 2008 monthly CRM meeting where goals and objectives were reviewed against the general business goals set by Eleanor Hong and Greg Ahern.

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Charles de Gruchy, Monthly CRM meeting -- CRM GOALS, Aug2008

  1. 1. aim: Marketing Servizes 2008 CRIVI CHALLENGES REVIEW August 08 Monthly Meeting Confidential - Do Not Distribute
  2. 2. CHALLENGES CURRENT CHALLENGES - Historically, catalog product selection has been based on vendor ability to pay versus marketing strategy based on business goals and profitability GOALS Measure catalog mailings based on page, category and product performance to improve incremental sales and margin Apply the same financial qualification standards to participation in catalog as that currently in place for rotos (hurdle tool) Base product selection for mailings on what’s right for the market first then sell the concept to vendors for participation Confidential - Do Not Distribute
  3. 3. CHALLENGES CURRENT CHALLENGES Broad-based customer targeting of mailings based on historical spend/ profit versus predicted purchase patterns GOALS Capitalize on the predictive purchase patterns inherent in the growth and development of children Develop predictive models based on next likely product purchase. For example, profile previous buyers of bikes just before the purchase was made, then target that profile with a bike offer. Confidential - Do Not Distribute
  4. 4. CHALLENGES CURRENT CHALLENGES GOALS - Financial implications of - Develop multi-dimensional current offer strategy are Segmentation model based less than optimal. on customer value score, . Targeting of offers is lifecycle and behavior currently focused only on Characterlstlcs historical spend and profit deciles - Develop testing strategy - Test, learn and roll out successful strategies Confidential — Do Not Distribute
  5. 5. CHALLENGES CURRENT CHALLENGES GOALS - Differences between - Measure catalog measurement of performance based on page, performance based on category and product customers mailed/ not mailed performance to improve and product performance incremental sales and based on pre/ post event margin - Define key performance metrics across both mailing and financial results analysis to support consistent program evaluation Confidential — Do Not Distribute
  6. 6. CHALLENGES CURRENT CHALLENGES - Prohibitive mailing cost increases in 2008 — Postage up ~ 18%. — Paper up ~ 30% — Ink up ~ 10% GOALS Change catalog format to hit lower postage rates Move away from multi-page catalogs to more targeted, single -focus se| f—mai| ers Longer term — use minimal- cost mailing vehicles to drive customers online for the full product selection which then drives to purchase decision — online or retail Confidential — Do Not Distribute
  7. 7. CHALLENGES CURRENT CHALLENGES GOALS - Declining proportion of - Increase focus on capture response matched to rates at store level by household level. Need to providing stores with improve capture rates by performance feedback (BAM providing stores with report) Performance feedback (BAM - Leverage alternative capture Fepert) and IeVereQln9 methodologies (e. g. GBC) alternative capture methodologies (e. g. GBC) Confidential - Do Not Distribute
  8. 8. CHALLENGES CURRENT CHALLENGES Geoffrey’s Birthday Club is an under-valued asset The cost of maintaining Geoffrey’s Birthday Club membership base continues to grow exponentially The current strategy to migrate birth registry into birthday club is flawed. GOALS TRU should “own” the child birthday experience in America and revitalize the club experience by increasing child engagement and involvement with the brand Reduce costs by capturing preferences and migrating the program online Continue to increase membership through ongoing migration from registry Test more timely and relevant communications. Confidential - Do Not Distribute
  9. 9. CHALLENGES CURRENT CHALLENGES GOALS - Integration of Juvenile ~ Over-communicate marketing Strategy aCi0SS - Work to achieve compromise TRU and BRU presents challenges in all aspects of the direct marketing process Objectives and Goals Scheduling and Timing Product selection Mail list selection Expense sharing Roles & responsibilities Process management Confidential - Do Not Distribute
  10. 10. :37 geoilreys <i”i‘°3?ii'r'? "V OBJECTIVES L' IA 1. Create the definitive child birthday experience integrated across channels of sale from web to retail and retail to web. 2. Grow club membership 3. Deliver an incremental sales and revenue from the combined planner, card mailers and implementation of RFM segmentation 4. Increase overall repurchase and retention. Confidential - Do Not Distribute
  11. 11. geoiireys . .iii3‘“JldPaV STRATEGIES . '-A 1. Leverage “Smart” barcodes to distinguish active and inactive members and pass-along effect of program — Test reactivation tactics — Develop recognition tactics for long-term members — Drop long-term inactive members 2. Increase membership in migration program from BRU by testing into higher responding program — Estimated 800K additional members each year 3. Complete development of a world-class online experience tailored to engaging and sustaining child interest and providing a relevant and valuable information source for parents 4. Increase response and membership participation by delivering updated, relevant communications through updated program branding and age and gender-related cards Confidential - Do Not Distribute 11
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