OfficeMax Pushes Direct Marketing To The Max

The retailer is using predictive-analytics software from SPSS to analyze sales data and offer optimal flyers and direct mailings.

Laurie Sullivan, Contributor

April 26, 2005

2 Min Read

Since last fall, OfficeMax Inc.'s sales from direct marketing have climbed 24%, thanks to new predictive analytics software from SPSS Inc. The software is helping the retailer analyze sales data so it can offer specials geared toward specific customers via flyers and direct mail. The first mailing, a monthly flyer, was delivered to approximately 4,000 customers last October.

The statistical analysis and data gathered from the SPSS software also helps OfficeMax track buying patterns, as well as personalize consumer services with unique product offerings via phone and the Internet. "We look at past purchase history and customer characteristics on how customers shop," says John Hassman, OfficeMax's customer research manager. Hassman says prior data that had been collected in other applications, such as customer-relationship-management, is compared with similar promotions to confirm the success of each promotion that followed since using the SPSS software.

Decisions on product specials for mailings and marketing material are made by collecting and analyzing individual customer data for their business customers. Each receives a score based on purchase history. OfficeMax categorizes the scores to create groupings that are developed into customer-focused promotional campaigns geared toward pens, paper, printer ink cartridges, or other office supplies.

The data from the SPSS software also ties with Clarify customer-relationship management technology from Amdocs Ltd., which OfficMax uses in its call centers. This way the office-supply store can track calls and purchases made by customers following each mailing. A personal identification number for individuals identifies the caller and the purchase.

Although sales from direct marketing have climbed in the past year, it is clear OfficeMax still has work to do. The retailer reported last week that first-quarter income fell to $2.6 million, or 2 cents per share, down from $59.1 million, or 61 cents per share, in the year-ago quarter. Sales fell 34% to $2.32 billion from $3.53 billion in the same quarter last year, following the divestiture of Boise Building Solutions and Boise Paper Solutions, which OfficeMax sold in October.

SPSS for Windows is $1,499 for a business customer and $599 for single academic user. SPSS server licenses start at $15,500. There's a variety of pricing programs available, including multiple-unit pricing for site and network licensing, and maintenance programs.

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