Although we live in the middle of the information society and have access to more data than ever before, retail has a data problem. With current POS systems and retail software , it's only possible to have individual customer data through membership and rewards programs. This unfortunately paints a limited picture of your entire customer base.
How about detailed information about first-time buyers, frequency of visits from those not in your membership programs, and spending habits across store locations? As "big data" becomes the norm, salespeople need to find ways to really get to know all customers and use that information for the benefit of both consumers and the company.
POS systems and memberships offer incomplete data
POS systems revolutionized the entire retail industry – and for good reason. Product ordering and warehousing became more informed, it became easier to understand customer expenses, and in addition, forecasting sales and revenue became more accurate. But we're still missing a couple of pieces of the puzzle. While salespeople can gain amazing insights into their products, there's not enough data to break through at the customer level.
Membership programs help. When loyal customers sign up for membership services, their purchases are easier to track. Here you can then easily see how often private individuals buy and whether they have higher or lower average purchase values. But you still only get information from some of your customers – when you miss out on catching first-time buyers or someone who is unregistered.
This means that sellers have shortcomings in understanding consumer behavior. Although the information you can obtain is enough to draw certain conclusions about your customers and target audiences, you still largely base your business decisions on conclusions and guesses. It can also become more difficult to segment audiences and target marketing and sales campaigns without having more individual details. Getting to know your retail customers means opening up to greater business potential.
Key customer metrics that are often missing
So when can one get more complete customer information and what are the most important details to know? What are the crucial retail metrics that indicate customer experience success and what aspects of your customer journey do you need to look at to understand how your marketing and sales work?
These are fundamental questions that many companies today do not have the answers to.
With the advent of omnichannel marketing, sales, and retail strategies, many salespeople struggle with its implementation but also with trying to understand the performance.
Conversion rates – it's important to understand in-store behaviors such as visitor conversion rates, i.e. the percentage of all store visits that lead to sales.
But conversion rates also apply to your marketing and sales strategies. Do you track what percentage of impressions, recipients, and distributed goods from ads actually lead to a store visit and a purchase? These metrics are incredibly difficult to track and leave many companies completely in the dark when it comes to how their strategies work.
Average purchase value – what is the customer's average spend on in-store purchases? Do you know the methods you can use to increase it? Even a five percent increase in the average purchase value per customer can result in huge revenue gains for your business.
Frequency of visits – How often do customers visit your stores? This data may be based on your members' purchase history, but are you using this data appropriately? And what about customers who aren't in your system? Increasing the frequency of visits can also be an incredibly beneficial strategy for salespeople but if you don't know how to identify and leverage this data, you won't be able to improve customer experiences and marketing strategies.
How can salespeople benefit from getting to know customers better?
Without a doubt, the next step in retail will come from finding new and better ways to understand the full customer profile and the experiences you provide both online and offline.
Good customer experiences are crucial for building customer loyalty and increasing sales, but you can't create it without data. Making informed decisions when it comes to marketing, selling, and customer experience customization is essential for businesses to survive trends in digital transformation.
Audience segmentation and personalization are at the forefront of these trends. When you know your customers on an individual level, both become possible to perform.
Let's walk you through a scenario for how you can create an exceptional customer experience:
We say you have a customer who you know is making repeat purchases with low purchase value. Customer visits are irregular. How can you improve their experience? How can you make them feel important or appreciated and create opportunities for them to try new products?
With an appropriate customer strategy based on omnichannel marketing, you can make this customer come into the store more often due to product-specific campaigns. Or you might use geolocation to invite them to their nearest store, or even lure them in when they're physically nearby. Invite them to try new products by providing recommendations based on their purchase history. And why not offer volume discounts?
Finally, you can follow up on the post-purchase to find out what they think about their shopping experience and about the recommendations they received. Use predictive analytics to estimate when they might need to repurchase certain items and begin the process again — to create a closed customer journey where you engage them at every step.
Individual customer data is crucial to strengthening the relationships you have with your customers. When the right data is captured and used correctly and strategically, you can turn your business into a powerhouse to create real value for customers that can increase sales and improve perception and awareness of your brand. It makes you a leader in offering better customer experiences.