The Challenge

A regional grocery chain was looking to increase in-store traffic and boost transaction volume across their locations. Facing intense competition from national and local grocery chains, they needed a more efficient way to attract high-value shoppers.

Historically, they relied on 6x9 saturation postcards—blanketing areas around each store with a coupon offer. While this approach generated some traffic, it lacked precision. Much of the spend was wasted on households unlikely to respond, driving up their cost per transaction.

Our Approach: From Saturation to Smart Targeting

For the initial test, we took a familiar approach—mailing to geographic areas near each store—but layered in something new: data-driven targeting.

By enriching their mailing list with detailed demographic data, we uncovered the household characteristics most predictive of redemption and spend. Some insights confirmed assumptions. Others revealed untapped opportunity.

Building a Smarter Predictive Model

Using insights from the initial test, we developed a custom RPM Scoring Model that combined these predictive variables. This allowed us to rank prospects by likelihood to respond—and target the top-tier households in future campaigns.

We also built a robust database of responders, rich with demographic and behavioral data, enabling even more precise targeting and performance forecasting moving forward.

The Results: Lower Costs, Higher Performance

Two years into their direct mail program, the results speak for themselves:

• Cost per transaction nearly cut in half — from $11.66 to $5.96. 
• Sales doubled — Nearly 2x more revenue generated per program.
• Transaction rates surged from 5.4% to 8.8% — a 63% increase.

Conclusion

With data-driven targeting and continuous optimization, this regional grocery chain turned a traditional direct mail program into a high-performing marketing engine. By understanding who their best customers are—and where to find more like them—they’re spending smarter, reaching better prospects, and driving stronger results at the register.