Analyze Database to Drive In-Store Sales
In the good old days, many retailers could greet customers by their first names and ask about their families. This intimate customer knowledge produced better service, which in turn created customer loyalty.
But things changed. Customer knowledge has become more difficult to acquire. A solid core of regular customers was replaced by an irregular flow of new customers who travel greater distances. In addition, the size of retail businesses has grown, as has staff turnover. Owners and managers are spending more time on back-office operations and less time with customer contact.
Early attempts at gathering customer data using technology were only partially successful. Devices such as punch cards were used, but they were awkward and programs were difficult to administer. What's more, owners feared that if they approached the information-gathering task too aggressively, customers would interpret their efforts as an invasion of privacy.
But a new generation of technology has made it possible for retailers to gather extensive customer information at the point of sale quickly, easily and unobtrusively. Using a store's POS system along with credit card data or other transaction-monitoring devices, such as voluntary participation programs, information can be captured and formatted so that retailers can measure and manage performance, create loyalty programs and develop aggressive marketing campaigns.
With the appropriate software integrated into a POS system, gathering information yields as much quality data as a questionnaire. A simple swipe of the card at the POS produces the credit card number, which can be used as a member ID number, eliminating the need for a separate frequency or loyalty card. This number can be matched with a name and address at a later point for use in direct mail promotions.
Each customer visit is recorded in a sales activity report, seen at an aggregated level. The data includes number of visits, average bill, total dollars spent and the date of the first and last visit. This data can be compiled for a single store or across an entire chain.
Demographic and lifestyle information is captured, as well as special events such as birthdays or anniversaries, which can be used for special event promotions. Again, this information can be seen only at the management level.
Once captured, the data can be transferred easily into formatted reports such as visit/spending history or aggregated past purchases. The reports can then be used to promote awards programs for frequent customers and big spenders.
And that's just the beginning. Using reverse appending, credit card records can be matched to huge consumer databases. From this process, up to 60 percent of customers can be identified with full name and address, as well as critical demographic, geographic and lifestyle information. To protect the customer's privacy, no personal credit history or specific purchasing information is divulged other than the sales information for that particular retailer.
This information can then be used to develop high-yield marketing programs. Campaigns can be honed using such triggers as number of visits, dollars spent, ZIP code, birthday, gender, age and last name. With incentive programs, for example, reports can be printed out right at the POS.
It's important to remember that information must be used in a way that results in more customers and greater customer loyalty. The goal is to increase the amount customers spend per purchase, expand the frequency of visits by customers and generate trials by new customers.
Design loyalty programs to perform one of these sales-building feats in a focused and measurable way. They should also have the flexibility to execute all of these functions. Good software will automatically trigger rewards based purchases, time of day, pre-set spending levels, number of visits or other factors. Look for software applications that integrate easily into a POS system and are supported by powerful database applications. These systems can drive a variety of consumer-rewards marketing campaigns.
A few examples will illustrate the potential. Scan-saver loyalty programs instituted by supermarkets have had widespread acceptance and success. Some grocery chains have reported up to 60 percent participation.
Another example of a successful customer-loyalty program is the model used by car rental companies. Members of loyalty programs can avoid lines at the airport ticket counter and go straight to their car. This option has great value to customers but only minimal cost to the rental car company. Restaurants could institute a priority-seating program for loyal customers.
Customer information can also be used to identify upselling opportunities. Knowing that Joe and Jane Diner always order wine, begin with appetizers and have a preference for fish, for example, a restaurant can make suggestions. Restaurant owners who use upselling techniques report a 4 percent increase in sales.
Retailers can make their guest services more accessible by using Web-enabled software. This features a direct interface between the retailer's Web site and software modules installed on the point-of-sale system that opens up a world of add-on sales opportunities. Customers can purchase gift certificates, sign up for a loyalty programs, fill out a comment card, enter a contest or check a balance on their house account. In addition, with on-line access to their customers, retailers can notify them about special menu items, promotions and rewards, all of which builds closer personal relationships.
Finally, customer relationship management software manages all the customer touch-points. CRM modules include guest loyalty, gift certificate or gift card management, delivery and take-out, advanced reservations, customer comment card, credit card tracking, and campaign management.
All that's necessary for retailers to gain a new level of customer knowledge and increase sales is right software and the swipe of a card is all that's necessary.