At a “Competing on Business Analytics” event sponsored by SAS and Accenture in Chicago this week, Mike Haaf, former Food Lion SVP of Sales, Marketing, and Business Strategy, described a broad and successful program of analytical marketing and operations at the Carolina-based grocery retailer. When Haaf arrived at the company in 2003, its performance was suffering and cash for investments was scarce. So he embarked upon a bootstrapping effort to fund analytics through analytics. The first effort was to determine what was really working in marketing programs through the use of randomized testing approaches. When the testing revealed that a program wasn’t working, Haaf redeployed the dollars into further analysis.
I’ve talked with some of Haaf’s direct reports about their testing program, which continues today and has been very successful. It’s used to test a wide variety of initiatives, including promotions, store renovations, new store formats and brands, and even whether lobster tanks help sell more lobsters (yes, says Haaf, but only in stores where customers want to buy lobsters in the first place).
Under Haaf Food Lion also embarked upon a wide variety of other analytical programs, including:
- Optimized pricing;
- Store localization and allocation optimization;
- Customer segmentation;
- Targeting of promotions based on loyalty program data;
- Marketing mix optimization.
Haaf described the cultural value of admitting that some of his own ideas didn’t work (including an idea he had for a bus route to take customers to stores) when the data and analysis proved them unsuccessful. He also overcame a lot of initial resistance from employees who weren’t familiar with analytics and statistical thinking by offering education programs to them.
Haaf recently left Food Lion in a reorganization of its parent company Delhaize’s US operations, but there is little doubt that an analytical marketer with his leadership abilities will soon be directing other such programs elsewhere.