Making Your Retail Data Work for You
Many business leaders around the globe say that “data is the new oil” in the world economy. While that comparison is often debated, it doesn’t change the fact data helps all organizations make better decisions. That means mining it, managing it, and putting it to work is vital to the success of any business, and many retailers aren’t aware they’re awash in data they aren’t putting to work. That’s why adopting the latest retail data technology with features and integrations that work in unison to leverage it is so critical.
Deloitte, one of the largest accounting organizations in the world, estimates that 90% of business data generated in the last five years is unstructured, meaning it exists in documents such as invoices, emails, reports, and even digital photographs and videos. Retail data technology companies specialize in organizing and delivering it in a format that independent businesses can put to work.
Getting Your Data Together
“Putting data to work. What does that mean? It’s important that independent businesses shift their thinking about data,” says Jeff Rogers, marketing, sales and partnerships director at Paladin Data Corporation, a retail technology provider for independent businesses. “We see this across the board. Whether you’re a store that doesn’t currently use a technology system or a highly profitable multi-store chain, putting your data to work will and should become the primary focus.”
Online and big-box giants like Amazon, Google and Home Depot have largely succeeded, and changed the business landscape, by mining and managing the huge amounts of customer and retail data they collect. How often do we browse the internet for a product only to later see advertisements for those same items pop up on practically every website we visit? That’s big retail data at work.
Independent businesses can operate just as efficiently and effectively by enlisting and utilizing the tools available in a comprehensive retail platform that mines and manages a store’s retail data. Ace Hardware CEO John Venhuizen says his company’s stores, most of which are independently owned and operated, successfully compete with the big-box boys by knowing their market, their products, their customers and using their data.
“We have an irrational pursuit of amazing service. The red vested heroes that work in our stores — 100,000 of them around the world — that are owned and operated by local owners provide a level of service for which Ace has become famous,“ he tells Hardware Retailing.
Ways to Put Data to Work
Most savvy business owners by now are well aware of how to mine retail data by collecting customer information through sales transactions in their point of sale systems and rewards programs. However, there are effective ways to collect consumer feedback that can help improve customer service. One is the utilization of Net Promoter Scores (NPS), a management tool used to gauge customer service, satisfaction and loyalty.
“We launched an NPS system and what we’ve learned from it is monumental,” Rogers says. “It’s reshaped our business. We use it to keep a pulse of our client sentiment and tell us how we’re performing. That’s what it comes down to for every business – develop insights and make better decisions based on the information you have at your fingertips.”
Customers are Kings and Queens
Customer satisfaction isn’t what it used to be. Before the internet, businesses called the shots as customers shopped at local stores during regular business hours. Today, the tables have turned, and the customer is king. E-commerce is open 24/7 and with shipping options ranging from same-day to free next-day, customers shop on their terms and don’t have to leave the couch to receive goods. However, unlimited shopping options also means the competition for customers has never been greater.
Consumer confidence in businesses isn’t what it used to be, either. The barrage of online sales pitches and lack of ethical oversight in the use of personal information has made consumers wary. Research from HubSpot shows:
81% of consumers trust their friends and family’s advice over advice from a business
65% do not trust advertisements, and 71% do not trust sponsored ads on social networks
55% no longer trust the companies they buy from as much as they used to
Consumers are also more knowledgeable than ever before – 92% research products online before they make a purchase. That’s why a store’s shopping experience and customer service is so critical today. The best way to improve the customer experience starts by finding out what shoppers think of your business by examining retail data. Tools such as Net Promoter Score help businesses gauge their customer experience, satisfaction and loyalty.
What is NPS?
NPS is a post-transaction survey that asks customers: “On a scale of 0 to 10, how likely are you to recommend our products or services to a friend?” Responses are categorized: Scores 0-6 are Detractors, 7-8 are Passives, and 9-10 are Promoters. To calculate an NPS score, subtract the percentage of Detractors from that of the Promoters. Dan Nesmith, founder and president of Paladin Data Corporation says NPS responses provide invaluable insights for his company.
“If there’s a secret to Paladin’s ongoing success it would have to be the loyalty of our customers. Many who were with us in those early years are still with us today,” Nesmith says of his 40-year-old company.
What NPS Does
It measures customer satisfaction and loyalty. Loyal customers provide the bulk of any business’s sales and supply most of its valuable retail data. A study from Small Biz Trends shows that 80% of a store’s future profits will come from the top 20% of its existing customers. Research also shows that it costs five times as much to attract a new customer than it does to keep an existing one, so keeping current customers happy is huge.
It identifies strengths and weaknesses. Nesmith says his company relies on client feedback to enhance client service and product development. He considers its responsive support one of the company’s pillars of success.
Businesses can learn from negative feedback. Legendary college basketball coach John Wooden said: “Failure isn’t fatal, but failure to change might be.” Businesses can learn as much from their NPS Detractors as they can from their Promoters.
Companies that use NPS retail data normally request feedback from all their clients to gauge their success. Independent retail businesses can do the same with their customer base. Feedback from Detractors is often more valuable because it helps identify areas needing improvement such as product assortment or employee training deficiencies.
It gives Promoters a stage. Studies show that roughly 90% of consumers are likely to recommend businesses after a positive shopping experience. And with 81% of shoppers now trusting word-of-mouth recommendations more than advertising or marketing, identifying those happy customers and offering them a chance to voice their support is easy with an NPS system and quality customer experience.
It aids in products and services development. Using the retail data and comments gathered from an NPS system gives businesses a tool to improve their products and customer service. Feedback about specific store associates can be used to offer kudos and aid in training procedures.
“We learn a ton from our clients and frequently leverage their feedback to influence our product development. It’s our job to make their operations as simple as possible so they can focus on their customers,” Rogers says. “All businesses need to focus on the data they have available through their digital tools to constantly be improving their customer experience and product offering.”
NPS surveys can be administered in a variety of ways.
- Imbedded on e-receipts
- Included in e-newsletters
- Associated with rewards program messages
- Pop-ups on mobile apps
Low Tech Approaches
There are other ways to gather customer feedback. Suggestion boxes, short surveys on the back of printed receipts, and dedicating an employee to gauge customers about their shopping experience are a few simple ways to find out how you’re doing.
With retail stores increasingly combining their online and in-store customer experience, and use of mobile shopping gaining momentum, retail data from customers is readily available and ultimately valuable. Putting it to work to improve customer service and refine product offerings is easy with the right tools.