MAVEN CAFE

Customer Segmentation & Promotional Strategy

Data-Driven Insights from the Café Rewards Program Test

Prepared for:

Chief Marketing Officer

Last updated:

Project Overview

Objective:

Analyze 30-day promotional offer test results to identify high-value customer segments and optimize future campaigns.

Test Scope:

  • Participants: 17,000 existing rewards members
  • Data Collected: 272,388 events (offer sent/viewed/completed + transactions)
  • Offer Types Tested: BOGO, discounts, informational

Key Question:

"Which customer segments respond best to which offers?"

Test Highlights

Participants

17K

Test Duration

30 Days

Data Points

272K

Revenue Opp

$2.3M

Executive Summary

$ Headline: $2.3M Revenue Opportunity from Precision Targeting

Personalized offers

25% conversion

vs 5% for generic

Top 20% customers

70% of revenue

VIPs (4% of base)

32% test revenue

1 Recommended Actions

  1. Launch VIP concierge program (Projected ROI: 9.0x)
  2. Reactivate Sleeping Buyers with 25% discount SMS (15% recovery rate)
  3. Convert First-Time Buyers with "2nd visit free" offer

2 Segmentation Methodology

  • RFM Recency, Frequency, Monetary analysis
  • ML K-Means clustering (8 segments)
  • Data 14,492 customers with complete histories

3 Quick Wins

VIP Concierge Program
Win-Back SMS Campaign
First-Time Buyer Incentives

Customer Segment Landscape

Segment Size Profile Opportunity
Champions 24% High spend, recent, loyal Retain & reward
Slipping Away 17% Inactive, low value High churn risk
First-Time Buyers 28% Recent, growing Convert to loyalists
Frequent Shoppers 21% Frequent, low spend Upsell/bundle
VIPs 0.24% Big spend, frequent White-glove service

Segment Distribution

Revenue Contribution

Quick Win Campaigns (0–30 Days)

VIPs

Tactic: Concierge gift + early access

Goal: Retention (95%)

Your 100th coffee is on us.

Win-Back

Tactic: SMS + 25% discount

Goal: Reactivation (15%)

We miss you! 25% off for 48h.

First-Time

Tactic: 2nd visit = free pastry

Goal: Conversion (40%)

Enjoy your next coffee with a treat.

Upgraders

Tactic: Bundle promos

Goal: AOV lift (+25%)

Upgrade to premium for 15% less.

Revenue Impact Forecast

Initiative Revenue Gain Cost ROI Payback
VIP Program +6% $3K 9.0x 11 days
Win-Back +12% $8K 5.2x 21 days
First-Time +9% $5K 7.1x 17 days
Total +27% $16K 6.8x <30 days

ROI Comparison

Payback Period

Implementation Timeline

1 Phase 1: Foundation (Weeks 1-2)

  • Integrate segments into CRM
  • Train staff on segment identification
  • Build real-time monitoring dashboards

2 Phase 2: Activation (Weeks 3-6)

  • Launch VIP concierge service
  • Deploy automated win-back campaigns
  • Enable POS upselling prompts

3 Phase 3: Optimization (Weeks 7-12)

  • Implement predictive churn scoring
  • Develop dynamic pricing engine
  • Launch Loyal Core referral program

Success Metrics

Customer Lifetime Value

Baseline

$104

Target

$130

Overall Churn Rate

Baseline

22%

Target

15%

Campaign ROI

Baseline

3.2x

Target

6.8x

VIP Retention Rate

Baseline

88%

Target

95%

Conclusion & Next Steps

"Precision targeting is no longer a luxury – it's a revenue strategy."

CMO Decision Box

  • Approve $16K test budget
  • Launch Phase 1 campaigns
  • Set up KPI dashboard by Week 2
  • Review segment performance in 90 days

90-Day Growth Levers

Tiered Loyalty

Champions + First-Time

Predictive Alerts

Slipping Away

Referral Program

VIPs + Frequent

Educational Flows

New & Low-Engaged

📚 Analysis Files & Notebooks

GitHub Repository

Access all source code, notebooks, and data files:

View on GitHub

Jupyter Notebook

View the complete analysis and model development in a single notebook:

View Jupyter Notebook