In the highly competitive retail marketplace, there is always a need to try and stay one step ahead of your competitors. Excellent merchandising, product sourcing, branding and marketing play a large part in that success; however, one area that can make you stand out, but is often overlooked – or under-used — is smart analytics. As recent studies have shown, analytics tools are still a challenge for many retail marketers.
We’ve worked with many retailers who could have made a real difference in their performance by answering some key business questions using analytics. In our experience, many users of marketing databases haven’t had any training in identifying the questions they need to ask of their data to support better decision making.
Here are eight steps to help retailers focus on how to gain insight into their customers’ behavior, and learn where issues and opportunities exist.
Adaptive Marketing: Focus on Customers, Not Channels
The time has arrived for the adaptive customer experience, which can be defined as a customer experience that automatically adapts to the unpredictable behavior of your customers and naturally improves every single time a customer interacts with your brand no matter where and when the interaction occurs.
By converting linear customer journeys into dynamic opportunity trees, we can let the customer control their journey while we make sure we have all their relevant information needed to recognize who they are and how to service them upon every interaction.
It’s easy to get drawn into all the detail when you start to analyze your data, and it can lead to a lot of useful information. But you might get caught in the weeds and miss some of your biggest opportunities. It’s always best to start looking at the big issues you want to solve and drill down into the detail later.
Question, question, question
The best analysts are those with lots of questions. Once you establish the questions that are most important to your business, you can create the questions that you want to answer. Many people new to analysis tend to come at the challenge primarily focused just on data and technology. Though these are clearly important because they enable you to answer your questions, the starting point should always be centered on what you want to find out. Start with the following questions:
- What percentage of our customer base is most important?
- Where do we have a problem – acquisition, retention, reactivation or development?
- Is our current marketing working?
By focusing on these ‘big picture’ questions, you’ll start extract value from your database faster and create a roadmap of the data that will best support your business goals.
Automate Your Analysis
Within a typical retail database, you’ll find there are more questions that could be asked than you have time to answer.
This is where it becomes vitally important that you create standard reports and analysis that can be checked quickly. By using these reports, you can rapidly see if there are any issues. Perhaps you can include a traffic light system in your standard reports. Or using standard reports provided by your database supplier, you can get the answers you need without having to spend hours each day, week or month, checking whether there’s a problem.
Drill down when you need to
When you do spot an issue in a report, you want to be able to drill down quickly to find out more. For instance, if you can see an increase in customer retention rate, you want to be able to rapidly analyze some of the reasons why. Is there a different profile of customers who have stopped buying from you? Are they from particular age groups, genders or locations? Are they customers who’ve been with you a long time? Have you been communicating with them regularly?
By drilling down, you can start to uncover patterns in your data, and then use the results to take immediate action, perhaps adjusting your campaigns to reflect what you’ve learned. You can start to uncover patterns in your data, and then use the results to take immediate action.
Share and use results
The most successful organizations are those that share knowledge about the business. So. if you’ve discovered some interesting patterns in your database, it’s important to make them available to your colleagues. This can often be done via a regular ‘knowledge share’ session with your peers, or by saving results as dashboards that your colleagues can access themselves.
This also helps break down any silos of data or data analysis that might be present in your organization.
Analysis on its own is very useful and helps you as a business better understand a specific situation. But, unless you use the results to act, much of this knowledge is wasted. For instance, if you discover a group is at risk in your database, then why not develop a campaign to retain them as customers? Ideally, you’ve got technology in place which enables you to drag a selection from your analysis straight into a campaign template in a matter of seconds without having to use multiple tools.
Smart retailers certainly start their campaign planning by looking at their customer base, and then use the insight gained to shape and plan their marketing tactics.
Keep it customer centric – and adaptive
Many retailers have a wealth of information on store, product and channel sales. However, the one thing often missing is holistic knowledge of the customer. This is where analytics can really ramp up now.
Every time your customer interacts with your brand, the adaptive customer experience can use both historical and in-the-moment customer relationship information to deliver the right message. It can then dynamically spread the new state of that customer relationship across all potential touchpoints, in milliseconds. Yes, smart analytics will help retailers understand patterns in customer behavior and engagement, but adaptive customer experience is a direct step to create more lasting and profitable retail customer relationships.
Jeff Hassemer is Chief Strategy Officer at Alterian