Customer Success Stories - Musti Group: ROMI and data-driven management as the driver of profitable growth

Highlights

Sellforte's ROMI modeling showed that almost half of the campaign's sales are driven by external media:

• Unaddressed leaflets were the most effective medium. They performed exceptionally well for Musti.
• The ROI of leaflets improved by +50% with postal code optimization.
• Understanding the optimal media mix enabled Musti to increase its media investments by +30%.
• In addition to ROMI modeling, Sellforte helped Musti clarify its promotional strategy by defining clear roles for each individual product.
• Altogether, the cooperation between Musti and Sellforte led to a +1.4M€ increase in yearly margin.

Client Context

Musti Group is the leading Nordic pet care specialist operating in Finland, Sweden, and Norway:

• Musti Group's net sales were 246.6 M€ in 2019.
• The group has 277 stores (own and franchise), and it employs 1,100 experts.
• Musti's mission is to make the lives of pets and their parents easier, safer, and more fun. In addition to an extensive product assortment, Musti provides a selection of pet care services in many of its brick-and-mortar stores.

Musti experienced an amazing growth rate during 2014-2018 (29% CAGR). In 2019, Musti wanted to analyze which marketing activities would maintain the great growth track:

• Musti uses various media channels to varying degrees, which requires advanced & continuous ROMI modeling.
• Leaflet marketing was performing very well for Musti, but areas for improvement were to be found with more thorough analysis.
• Learning the main factors behind marketing effectiveness would enable Musti to optimize & allocate its media investments.

Client Objectives

Musti's commercial team wanted to understand, on one hand, what the main drivers behind media ROI are, and on the other hand, align the promotional strategy & activities with a sustainable growth plan.

• Musti wanted to understand how their leaflet is currently performing, i.e., how much sales and margin it is driving compared to the investment.
• The goal was to drive sales, but also to steer the marketing investment toward new non-member customers that weren't yet in their loyalty program.
• Additionally, analyzing past promotion effectiveness was required for the new product strategies.

Solution Outputs

Sellforte forecasted the leaflet ROI for each postal code area based on three independent criteria and presented a recommendation for new leaflet areas.

Sellforte analyzed the historical leaflet performance of postal code areas:

• Further independent external criteria were recognized, which had a strong dependency on ROI performance.
• By using multiple criteria, we estimated the total forecasted potential ROI for each postal code, even for those where leaflet distribution was never done before.
• Increasing leaflet distribution in high ROI areas and reducing it in low ROI areas allowed a +50% increase in leaflet ROI.

Sellforte developed a comprehensive view of which geographical areas work most effectively by visualizing store locations and ROIs on a heat map.

• The interactive heat map allows drilling into desired areas and evaluating them visually in regard to store location and realized ROI.
• Visualization of critical KPIs (e.g., share of houses, median household income, number of households) eases the strategic planning of future leaflet distribution.

To support long-term brand development, Sellforte helped Musti clarify the commercial strategy for each product, brand, and category.

• Looking at the historical performance of campaigns enabled Musti to analyze how different items had performed in campaigns, and what kind of roles Musti's product assortment included.
• Results revealed Musti's star promotions (promotions that have a great net-net sales and margin uplift effect), which played a key role on the leaflet covers.
• Additionally, the insights provided guidelines for Musti's pricing strategy.

Results

• Cooperation led to a +1.4M€ margin uplift on a yearly level, more than doubling the margin growth rate.
• Understanding the optimal media mix for Musti and proving the results with hard data enabled a +30% increase in the marketing budget.

Client Testimonials