As markets evolve, retailers continue to shift from conventional methodologies for capturing customer data to more interactive, ongoing strategies. The use of these methodologies have changed significantly over the past decade, forcing retailers to find more innovative ways to analyze their key customers or risk falling behind the curve.
With customers actively seeking products from millions of brands, it is critical for retailers to capture and aggregate customers’ buying behaviors and overall perceptions in order to acquire timely information that influences things like product procurement, merchandising strategy and customer satisfaction. Retailers can then use this information to tailor offerings to specific customers and identify/sustain competitive advantages.
So how can retailers manage this process effectively? Among the seemingly endless strategies and applications, what works best?
POS (Point-of-Sale) data and loyalty cards have consistently proven most effective in tracking and analyzing customer buying habits. The data serves as a retailer’s own private investigator, providing them with the most accurate and complete records of their customers’ lifecycles and purchasing behaviors, including things like:
- What brand they buy most
- How often they shop
- The average check size per visit
Obviously this data doesn’t always tell the whole story, which is why it’s always good to utilize other means such as customer intercepts to identify customers’ preferences, attitudes and perceptions. Hard data doesn’t lie, and it plays an important role for establishing “push” and “pull” strategies.
POS data and loyalty cards have become the norm for most large retailers and grocers, but smaller businesses have been slower to adopt these tools for managing their customer database, which is largely due to reluctance that arises when considering the investment. What these smaller businesses fail to realize is that the long-term data harvesting capabilities these tools provide have huge implications for the enduring success of a business, especially when incorporated with a 360 degree methodology – a holistic approach to customer experience management.
What’s involved in a 360 degree customer approach?
Step #1: Analyzing current customer purchases through POS data and loyalty card tracking
- How often do customers shop at a particular location? How much are they spending on average per visit? What are their overall purchasing behaviors?
The data collected when a customer swipes their loyalty card at checkout or fills out an online survey after their shopping experience provides precious insights that can’t be found elsewhere, and it only becomes increasingly valuable as specific customer data is augmented and aggregated over time. Almost everyone has at least one loyalty card in their wallet, whether it’s for a grocery store, a retail apparel outlet or their favorite coffee shop. Beyond just collecting customers’ buying habits, a loyalty card also helps reinforce a brand’s identity, keeping it top of the mind and facilitating the tendency to go places where they can use their loyalty cards to collect rewards versus competitors that don’t have a rewards program. Check out this article for more information on how to construct a successful loyalty program.
Step #2: Identifying shopper sentiments while they are in store via customer intercepts
- What brought them to the store today? What were their expectations prior to the actual shopping experience? What did they like/dislike about their actual experience? How did they feel about your new product? Where else do they shop?
POS data and loyalty cards are great tools and a key element for an effective customer strategy, but they don’t explicitly identify consumer preferences, attitudes and perceptions. The only way to secure this information is by actually talking to customers during or immediately following their shopping experience. A customer intercept, also referred to as an exit interview, is the best tool for accomplishing this and is a necessary component for developing a complete perspective of a business’s customers. However, constructing a questionnaire that will provide the most pertinent and valuable insights is a difficult task – one that requires a high level of expertise. Download this case study to see how TrendSource helped a top grocer chain analyze customer opinions regarding a new product.
Step #3: Dissecting the data to develop an informed business strategy and implementing a system to monitor progress.
- What drives loyalty amongst your customer database? What is the profile of your best customers? What are the key performance indicators that drive ROI? Are there competitive influences at work that require further evaluation? Is your strategy proving successful or does it need to be reevaluated?
This last step involves analyzing the data captured in steps one and two to develop an appropriate customer strategy. However, depending on the industry and a company’s position in the market, it often proves beneficial to gain some competitive intelligence before deciding on a strategy, which is best done through mystery shopping. TrendSource helps clients obtain competitive insights by sending mystery shoppers to competitive locations to collect information that is important to their business. Once a strategy is determined utilizing all this information, it’s essential to monitor the execution of your strategy, which is also best done via mystery shopping. Having a trained mystery shopper act as a normal customer ensures that all this effort isn’t going to waste and employees are actually following procedures. Click here to see TrendSource’s unique approach to mystery shopping programs.
As you can see, there are several pieces to developing a customer strategy, but to “complete the puzzle” businesses must incorporate all these elements into a 360 degree approach that considers all aspects affecting a customer’s decision-making process. The companies that effectively participate in this ongoing strategy are consistently market leaders and maintain a loyal customer base.
