No, this isn’t “…another article about big data…” It’s just some examples of how to better leverage what you have in order to improve performance. You know, sell more and spend less.
We gather data all the time. And we analyze it – usually. (Though we’ve probably all encountered people that seem to stare evidence in the face and then ignore it…) Then most of us use that analysis to make decisions.
My stomach is growling. I haven’t eaten today. The refrigerator is empty. I should go to the grocery store and get something to eat.
My pants feel a little tight after finishing that huge lunch. I haven’t been to the gym in months. I should get back to a healthier lifestyle – exercise and healthy eating.
We’re starting a family. We want to be in a better school district. We want more room. We should start looking for a new place to live that will provide us with better schools, more room, a safe neighborhood, and <insert other criteria here>.
Ignoring Data at the Office
But when we get to work, many of us ignore data or work off partial data (the kinds that’s easiest to get at…regardless of quality).
The most example for small and medium-sized organizations comes down to pricing, messaging and offers, and channel selection. (Who can ever forget the all-time favorite “Hey, let’s build a Facebook Page!”)
Talking with marketing executives and business owners, it’s not uncommon to ask about their target audience or even their best customers and get a very generic and broad response. (I recently had a business owner tell me that his target audience was “…anyone that speaks English…”)
So what’s the solution?
Well, I recommend starting with questions that will help you work smarter, more efficiently…help save you money and/or improve key performance metrics like cost per sale, average order size, order frequency etc.
How to attract more new customers?
Start with your existing customer data. For consumers, where are they located? What do they buy? How can I identify non-buyers in that same geographic footprint and reach out to them – make them an offer to become a customer!
Tried that and it didn’t work? Then get out there and ask them why.
Ask them if they know your business exists. Ask them what they have heard about it and what they think about it. Ask them where they currently buy what you offer. Ask them why they shop there – and what they like and what they would like to see improved.
Don’t want to do that on your own? Hire someone that does it for a living. Or go to the local college and talk with the marketing professor about creating a project for the students. Whatever it takes – get it done.
Also, keep in mind that this isn’t a one time only offer/attempt on your part. Let me use the local grocery store example to make my point…the average family of four spends about $600 per month on groceries which translated to about $7,200 per year. And the average family stays in their home about 7 years so the neighborhood grocery store has the potential of making more than $50,000 off the family of 4.
Let’s assume that the store posts 10% margins…that’s a $5,000 profit per family over 7 years. So the trick is to spend just enough to earn and retain their business. (That Wednesday circular they send costs less than $1 – you get 52 of them a year – so they spend about $52 a year to get you to stop in and spend $7,200 so they can generate $720 profit.)
In other words – reach out to potential customers on a regular, on-going basis in a way that makes financial sense. (That’s why testing is so important – you can test a couple of offers and see what works best.)
Don’t have the data you need?
Figure out what you need and how you can get it – quickly, accurately and inexpensively.
Is it something you can get from the customer and capture in your CRM? Is it something I need to get from outside sources for free? Or is it something that I need to get from other businesses for a fee? (Firms like Experian or Claritas for consumer audiences, and Dun & Bradstreet if you target businesses.)
Never done this type of work before – hire someone that has and learn or let them do it for you. Or head over to the local college marketing department…
How to motivate customers to come back and buy again and again…
Too many businesses focus on attracting new customers and work under the assumption that once someone buys from us, they will never buy from anyone else ever again.
And that’s crap. Expensive crap.
Go back to your grocery store habits. Ever stop at another grocery store when you were in a hurry? Or they had something you really like that your regular store doesn’t offer?
Ever stop by the local Staples to pick up printer toner, only to discover they are out of stock? And did you go to another Staples or did you hit up the local Best Buy or Target? Or did you go home and just order it from the manufacturer’s site because they offer free next day delivery?
You get my point.
So how do you use data to improve sales to existing customers? Well, if you sell consumable products you can predict when they will need to buy again – so, like Target Pharmacy, offer a program for “automatic refills”. Call them when you project them to be running low, tell them you have the product waiting for them at the front check out and maybe even offer to deliver it.
Or my favorite way to use data – the Amazon way. “People that bought this product also bought…”
Short story – then I will call this post done. Early in my career, working for a tech firm that sold directly to businesses, I was talking with our best sales rep. He had this one company that was buying a crazy amount of printers from him each month and he was raking in the sales.
So I asked him why they only bought printers – and why they didn’t buy desktops, laptops, monitors or other items that we offered.
He said he never thought to ask. On the next call, he asked. And he was introduced to the buyers for those other products. And his sales increased 10-fold.
Now, you might read that and think “…not that good of a sales person…” – and that would be too harsh. He was doing a great job and no one – not his supervisor, or even the customer – had thought about other product lines. It happens. He was taking some data and using it well but he was also ignoring data (those printers had to connect to something that sent print jobs to it) which cost him opportunities to sell more.
Alright, that’s it for now. Was any of this helpful? Have you tried any of these tactics before – how did they work for you? Have you found even better ways to use data to drive better decisions?