Chuck E. Cheese’s Uses Customer and Market Data to Generate Dynamic Coupons, Achieves 74% Lift

Celebrating over 30 years of success as a place Where a Kid can be a Kid®, CEC Entertainment, Inc. is a nationally recognized leader in full-service family entertainment and dining. Chuck E. Cheese’s stores feature musical and comic entertainment by robotic animated characters, games, rides and arcade-style activities geared to families with children between the ages of two and 12. The company and its franchisees operate a system of 537 Chuck E. Cheese’s stores located throughout the United States (excluding Wyoming and Vermont), Canada and abroad. Currently, 490 locations in the United States and Canada are owned and operated by the company. For more information, visit www.chuckecheese.com.

Problem:

One Size Fits All?

Chuck E. Cheese’s had a “one size fits all” discount strategy when it came to coupons sent through the company’s email program. No matter which location they frequented, customers across the country all received the same email coupon offers to receive discounts on tokens and food.

CEC felt that with this approach, they might be missing opportunities to maximize revenue by tailoring offers based on customer and market data. Chuck E-Club members, their most loyal guests, have always been rewarded with the best discounted coupons. However, CEC suspected certain markets would respond favorably to smaller, yet still-attractive discounts. Other areas, including those directly impacted by hardships facing today’s economy, would require deeper discounts to drive them to stores. If their assumptions proved correct, the company knew it would have a powerful tool to achieve key business goals: Generate greater foot traffic in markets that needed it and increase profit margins in markets that would support reduced coupon offers.

Need:

More Targeting, More Personalization

CEC needed a solution that would allow them to:

• Collect more detailed subscriber profile data, especially geographic data.
• Put processes in place to make sure all new Chuck E-Club members would have a restaurant location assigned to their email address.
• Deliver consistent, relevant coupons using dynamic personalization and landing pages

“During our initial registration process,” said Ryan Linders, marketing manager for Chuck E. Cheese’s, “we collect data points with specific targeted business opportunities. As we continue to see an aggressive growth of our Chuck E-Club database, it’s critical for us to continue to monitor and ensure our guests’ profiles are complete and up to date. It’s also important for us to periodically scrub our database and send emails to active guests who seek out our content and offers.”

Solution:

Bluehornet Dynamic Content

CEC tapped BlueHornet to provide a solution for more personalization on all aspects of their coupon program—from emails to landing pages. A targeted preferences campaign was sent through BlueHornet, asking current subscribers to confirm or update their geographical location via the CEC email preferences page. Location information generates a specific region code in the BlueHornet tool, which is used to send emails containing dynamic URLs that point to custom landing pages. The pages hold coupon values that are based on the subscriber’s stated geographic location—allowing CEC to customize the discounts given to particular markets and make changes to those discounts as the market landscapes change over time. The strategy also guarantees that recipients are getting the best discounts available for their area.

“It was important for us to follow the market pricing strategies that have been established in our newspaper FSI program,” said Linders. “We used our FSI tier prices as our ceiling, and built in deeper discounts for our Chuck E-Club members by market. Based on economic conditions, this pricing structure has also given us the ability to react to changing margin pressures and consumer demand.”

Results:

Targeted Content Leads to Rise in Revenue

• Dynamic coupons in welcome emails and monthly email campaigns generated a 74% lift in CEC email coupon revenue in 2008.
• CEC saw impressive overall database growth of 59% over the 2008 calendar year.
• Open rates and click through rates rose across the board for emails that contained the personalized content.

Measured Email Campaign Results (comparing Nov ‘07 to Nov ‘08)
• Opens Increase = +20.9%
• Clicks Increase = +28.5%
• CTOR Increase = +3.3

Back to case study index

Post a Comment

Comments will be posted upon approval by a moderator.
Email addresses are used for moderation purposes only and will not be published on this page.