Posts Tagged ‘Customer Insight’

Using Social Media to Listen to Customers

Thursday, May 21st, 2015

iconsFor a small business or retail store, “listening to customers” happens everyday. But as explored in the post “2 Reasons Why Store Managers Don’t Hear Their Customers” it may not be accurate. Truth is, there is real value in giving your customers multiple channels to engage in a dialog with you. With the advent of social media and the instant feedback loop of facebook, twitter, yelp and others it is possible to become aware of an issue and address it quickly in a way that can earn your store or business more respect than ever.

Some basic rules for engaging with a customer who provides feedback online are:

  • Always respond quickly. Negative and positive feedback should get the same urgent response. When a customer shares something positive, make sure to add a fun and humble response.
  • Thank customers for taking the time to make you aware of something. They didn’t have to and it means they still care if they are willing to try to engage with your brand online.
  • Don’t auto-respond: be brief, honest and respectful. Above all, be professional. Your responses will be online for months if not years into the future. Make sure you can turn off your emotions before responding.
  • Take disputes offline. If your customer is TRULY wrong, contact them privately to work out a compromise.

In the course of your business day, you may believe you are close enough to your customer to accurately anticipate what they want and need. A business person who believes that they completely understand their customer should ask themselves: if I don’t completely understand my spouse (or child, partner, parent, co-worker), how on earth could I believe that I completely understand all of my customers? Makes you think, right?

Net Promoter – the Most Common Small Business Feedback Tool

Thursday, May 14th, 2015

CHCKLSTOne of the most common retail tools for collecting customer feedback is a “net promoter score.” The concept of net promoter is simple. Customers are asked whether they would recommend the store (or service) to friends and family on a scale of 0-10 . A score of 9-10 is a promoter. A score of 7-8 is neutral. A 6 score or below is a detractor. Subtract the detractor percentage from the promoter percentage and you have a “net” number: the Net Promoter Score.

Promoters are customers who are enthusiastic about your store or brand and will keep buying from you. These are loyal customers who drive growth over time through their positive “word of mouth” marketing to their network. Neutral customers are currently satisfied but constantly at risk to switch stores or brands. Detractors are unhappy customers who can damage sales and give your store or brand a bad reputation throughout their network.

A net promoter score is useful for doing more than capturing your customer’s feedback at one point in time. It is especially useful when comparing scores over time or across locations. Savvy retailers look at their net promoter scores during peak hours and non-peak hours to understand the possible degradation in customer service during busy hours. They compare net promoter scores by floor manager to understand which ones direct and lead staff in providing excellent customer service and which do not. Most large retailers, restaurant chains and service providers use net promoter scores.

Customers are incented to provide a net promoter score by either going to a website or a toll-free phone number for a “less than one minute” survey. In return for participating in the scoring, customers can usually win a gift card or a discount on a future purchase. Customers are typically notified of the survey through register receipt messaging or from store associates directly. There are dozens of Net Promoter providers that can be found online – many integrate seamlessly with the most popular POS platforms.

Why Category Definition is Critical

Tuesday, August 5th, 2014

Screen Shot 2014-03-06 at 2.31.25 PMFor retailers who follow a structured category management review, the first step is defining the category. The idea of defining a category each year may seem obvious – even redundant year after year.  But the truth is that customers’ tastes and habits change. A review of trends and changing customer behavior can catch newly emerging opportunities so that retailers and vendors can capitalize on new understandings.  For example, a retailer who habitually reviewed away from home beverage consumption as carbonated beverages versus bottled water could overlook the trend for aseptic packaged milk product consumption and water flavor additives.

The implications can transform a retail store depending on whether its management defines their category as DVD Movies or At-Home Entertainment.  In one situation, they are locked into optimizing the DVD category alone.  In the second, they can evaluate Gaming, Cable Television, Satellite Television, even bar ware!  Defining a category is all about drawing boundaries in the same way your customer does.  So, a customer will ask their family “Which DVD should we watch tonight?” less frequently than they will say “What shall we do tonight?”  Consider the differences in these category definitions: Glues and Paints versus Crafting Supplies, Water Fountains versus Water Features, Party Invitations versus Party Supplies. What should come to mind are the changes in product selection and merchandising in the store that will better anticipate customer needs for these categories.

Category definition needs to be grounded in customer insights that are gained from several sources: affinity purchases uncovered through data mining market basket transactions, primary customer observational research and self-reported customer behavior.  Frankly, affinity analyses can be misleading if retailers do not carry a wide enough breadth of product to be a full solution.  For example, if a limited assortment grocer did an affinity analysis on birthday cakes, it may discover that the customers also purchased ice cream, paper plates and candles.  It could, however, overlook that customers purchased the remainder of their needs (wrapping paper, cards, balloons and invitations) elsewhere.  Primary customer observational research is expensive and time consuming.  Self-reported customer behavior is notoriously inaccurate.

For most retailers, the most cost effective way to discover unbiased customer insights is to review the customer research of their top vendors along with customer research from emerging niche vendors. Niche vendors are usually the first to recognize and exploit new customer patterns. Established vendors less routinely recognize changes in behavior. Their focus on current product lines and customer segments can create blind spots.  Take, for example, the difference between established home cleaning mega-vendors and environmentally-focused cleaning vendors like Mrs. Myers and Seventh Generation in recognizing the growing demand for less chemically-intensive home cleaning products.

For retailers trying to glimpse the future and create a compelling selection that will meet the needs of future customer demand, actively sussing out customer and shopper trends through every resource available is an ongoing endeavor.

Category Management Planning

Friday, March 14th, 2014

candy rackMost forward-thinking retailers use some form of category management to evaluate assortments, make sales and promotion plans and execute those plans to achieve sales. This cycle usually occurs once a year – but it can be more or less frequent depending on the category’s volatility. The category plan reviews past plans and research, vendor input into future customer trends and forecasts, supply chain and financial input to verify true costs and concerns and incorporating the best investment tactics for the retailer to meet its stated financial and customer objectives. Most retailers have a framework or template for these category plans that help the top merchandising executives make trade offs and decisions about future business investments.  Nearly every category manager can find an unexploited niche that could yield some level of sales growth. But a unified category management process helps focus the organization on the top priorities.

Taken in its entirety, the process is called a Category Review.  In the review the category is defined, its role within the company or store is defined, its sales and potential is assessed and a specific budgetary goal is set. With the goal in mind, discreet tactics around adding or reducing products, changing prices, changing promotions or changing merchandising are developed to meet the goal. The costs associated with the changes are approved and the organization implements the plan. From a top down approach, it is a proven process for capturing and sharing the best information about how to succeed in the category to remain competitive.

How to Set up a Low Cost Mystery Shopper Program

Friday, July 19th, 2013

inventoryHow to set up a low cost Mystery Shopper program that any savvy manager could create.  First, you cannot alert your staff to the mystery shopper program.  Putting them on notice will have them ratchet up to “best behavior” levels.  Second, select people who your staff will not recognize.  Then:

1)   Identify your main competitors. Be honest and include the tough ones as well as the easy ones.

2)   Ask for volunteers in your personal network to complete a mystery shopping survey in return for something of value. The best is to reimburse them for up to $20 of whatever they purchase at their assigned store.

3)   Provide your mystery shoppers with specific questions to answer. (see sidebar.) And a mandatory deadline for completing their store shops – 2 weeks at most.

4)   Assign a specific store (including your own) to each shopper. Do not tell them which other people nor which other stores are included in the study.  Each store should be visited by at least 3 shoppers at different times of the week/day.

5)   Give each shopper the same task so that each store is tested in the same manner. (ex: ask for assistance in finding the best solution for setting up a network printer to connect 4 devices, the best printing options for a home office under $175, etc.)

6)   Compile the answers and evaluate them analytically (in a spreadsheet or with a numeric measure that can be constant across all questions such as 1=never, 2= sometimes, 3= usually, 4=always.) Look for patterns.

7)   Share your findings with your staff and discuss specific ways to address each issue.  Set targets and measure against the new targets every day. For example, you can institute a new policy that all customers must be greeted within 20 feet of the door.  Change how you evaluate your people and reward them to ensure compliance with new targets.  Find people who are meeting the new targets and make them heroes.

If your business does pass the customer mystery shop experience with flying colors, it is time to do a similar survey evaluating assortment (count number of choices by SKU, brand and price points.) Evaluate promotions by comparing at least 6 months of advertised promotions to promotions in your stores during the same time. Evaluate prices by comparing prices on several dozen key SKU’s across competitive stores each week.

If you make an effort to remove your blinders and see your stores in the same framework as your customers do, you can ascertain how you truly stack up – and determine what to change to stay ahead of the competition.

A Mystery Shopper Program Can Point Out Blind Spots

Friday, July 12th, 2013

inventoryHow do you REALLY stack up?
Recently a client with three stores asked for help to create a strategy for the next 5 -7 years. They routinely talked to their customers and employees; there was even a customer survey two years ago. They concluded:

1) They were the best among their competitors. As evidence, a local business group had selected them to lead a conference round table on leading retail practices.
2) The two main obstacles to improving store traffic were poor locations that were selected over 25 years ago and lack of convenient parking.
3) Their customers were high-end shoppers who did not mind paying more for the high degree of customer service they prided themselves on.

Nevertheless, they felt pinched by new competitors opening nearby and lower profit margins as more sales skewed to discounted goods on promotion in their product of the month program. After listening to management’s point of view, I set up a mystery shopper program to see what customers actually experienced in their stores.


The findings uncovered that the stores were beaten in critical areas:

1. Customers were commonly ignored for up to 15 minutes upon entering the store.
2. Inquiries about products were met with direction to the product location but any additional conversation quickly revealed a lack of product experience or knowledge.
3. Store associates were more surly and unkempt than management observed.
4. Prices were competitive but not enticing, locations were convenient and product selection was appealing – but high-end customers were happy to drive further to have cheerful, knowledgeable staff help them make their purchases.

Think you can’t be fooled? Think again. The management team was on site six days a week. Their interaction with store associates had become so close that they no longer saw the lapses in service. Management rewarded task completion like putting away deliveries, making bank drops and completing the work schedule more than helping customers. At least, store associates believed there was more retribution for not completing tasks than for not assisting shoppers. And customers could grasp that in a single store visit.

Up next: how to create a simple Mystery Shopper Program any manager can administer.

A Retail Customer’s Journey

Wednesday, June 19th, 2013

 

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Many advertising campaigns are built around creating Awareness: Simply letting prospects know you exist and what you stand for – the brand promise. For many businesses, it is a logo, a tagline and an address repeated in as many outlets as possible (including online.) Awareness is the cost of entry to even be a part of a customer’s consideration set when they are ready to make a purchase.

Trial is usually spurred by a promotion or a convenient location.  A promotion is the reason to come into the store NOW.  Coupons, special sales, limited time offers create a sense of urgency and a call to action that get customers to open the door.  Once inside, your brand really comes alive: Greeting the customer, offering helpful advice, an environment that is clean, cheerful and intriguing, a straightforward check out and a sincere appreciation all combine to determine whether the customer will wish to repeat the shopping visit.

Repeat.  Over and over.  For customers, a satisfying first visit leads to second, third and fourth visit only if each trip is consistently appealing. For products with long purchase cycles, the time between visits can be weeks or months.  In furniture, for example, it can be years.  So that impression in the store must be long lasting.  A customer is considered to be in the “repeat” phase for as long as necessary until the customer would say that ABC Store is the ONLY store I go to for my office and printing supplies.  To keep customers repeating, retailers usually continue the promotions that have worked in the past.

A Loyal customer only considers one store to shop for their needs.  One “brand” if you will. They have had such pleasant and consistent experiences, that choosing which store to visit is no longer a decision.  Many brands get to this stage if you think about your own personal favorite brands of toothpaste, deodorant, coffee or shampoo.  Often, these personal brands are held so closely that the decision to buy them is automatic.   It is more about refilling the product rather than deciding which product to buy.  Similar relationships exist in retail when a customer builds a relationship so deep that they literally think of their grocer or bakery as “my bakery” instead of “the bakery.”

Evangelist customers are your best marketers.  They are the people who recommend your store, tell their friends about it and enthusiastically endorse your business.  Clever marketers push loyal customers to become enthusiasts by offering incentives to like us on facebook, review us on yelp or give special friends and family coupons to loyal customers to share out.

But a misstep along the line and customers move backwards along the sequence. It is why stores that were once popular wane because “the service isn’t what it used to be” or “they never have what I want in stock.”  Basic in-store fundamentals that do not meet expectations can ruin years of customer development along the path.  Retailers need to realize that the marketing journey is not just the elements outside the store that bring a customer to a store, but the entire journey.

Know Your Customers: Institutional Buyers

Friday, March 22nd, 2013

Screen Shot 2013-03-10 at 4.46.56 PMAs a retailer, you have many different kinds of customers that come through your door – or to your website.

 

Here are five things to keep in mind when your customer is an institution like a hospital, church or non-profit:

  1. Be patient. I cannot move quickly.  There are rules and processes in place to govern nearly every business decision.  Even if you are the best supplier, I may not be able to move fast.  Understand that my hands are tied and you may have to wait for approvals.  But realize that once you are an approved vendor, you will be rewarded with my business.
  2. Help me think things through.  I need to stretch every dollar I spend so unexpected charges are a nightmare.  If we can be thorough and creative by developing an everyday low price program that guarantees each purchase is as cost-effective as possible, you can win my business.
  3. Know that decision-makers change.  Even once you have my business, it is a good idea to keep educating our leadership team on why you are still our best resource.  Our directors and managers change often and the airtight pitch you gave last year may be completely new to our leadership this year. Keep educating us.
  4. Align to our mission.  Nearly as important as keeping our cost down is partnership with like-minded organizations.  Help us fundraise, market or donate to our causes.  We need support beyond a reliable supply chain.
  5. Be a trusted expert.  We have so many other things to do beyond purchasing products.  Tell us what we need to know (the good and the bad) in a straight forward fashion to help us weed through the details and get to the essential.  Help us use common sense to make good decisions and so we can focus on our mission.

Know Your Customers: Individual Consumers

Tuesday, March 19th, 2013

MSU GirlAs a retailer, you have many different kinds of customers that come through your door – or to your website.

 

Here are five things to keep in mind when your customer is an individual:

  1. Have what I need in stock.  As a consumer, I really don’t have a budget or a plan for my home needs.  When I run out, I need it.  So having my favorites in stock will make your store top of mind when I run out.
  2. Treat me well.  I have two main choices when I shop: the internet or a store like yours.  The internet is reliable and easy – but I certainly do not get personalized service.  You can make me feel special by remembering me, talking to me (and listening) and making thoughtful recommendations.  Throw in home delivery and why would I choose an internet reseller?
  3. Set your prices fairly.  I LOVE a deal and a sale.  What I do not love is paying full price one week only to discover that if I had waited a few more days I could have paid 20% less!  You know what I buy (based on my past sales history) so tell me when my favorites will be on sale at your store.  Remind me and invite me (without shouting!) and I will reward you with my loyalty.
  4. Be more than a store.  Connect with me on facebook, twitter or the community bulletin board.  I actually like knowing my shopkeepers.  So advertise in my church bulletin or school newspaper.  Seeing you at community events makes me trust you more than a faceless big box store or internet reseller.
  5. Make me feel good about giving you my business.  Remind me that when I shop with you my money stays in my neighborhood and my planet is greener. If I have a problem, please don’t hassle me.  Stand by your products and make amends when there are issues.  Really mean it when you say thank you.

Know Your Customers: Small Businesses

Thursday, March 14th, 2013

Portrait of store ownerAs a retailer, you have many different kinds of customers that come through your door – or to your website.

 

Here are five things to keep in mind when your customer is a SMALL BUSINESS:

  1. Remember my timelines are short.  I don’t really have a 3 or 5 year plan.  I’m ashamed to say a lot of my decisions are made in the moment.  So when you talk to me about ROI or long-term savings, I am more likely to just want to hear how you can solve the problem I have right now.  Be practical.  Once we establish a rhythm, we can talk about the future.
  2. Help me buy a solution instead of a price.  Sure, I want the lowest price I can get, doesn’t everyone?  But if you can help me understand how you deliver a better value, I will listen and even pay more money if it is the right thing to do.  Talk to me in a language I can understand and please don’t use words like “synergy” or “value proposition.”
  3. Make me look good.  I use your products to help me in my own business.  I can’t afford a failure because my customers see me using cheap knockoffs. Give me a high quality product and help me look better than my competitors.  Give me pointers to be even better.
  4. Reward my loyalty.  Because I am a small business person myself, I like doing business with other companies that value simple, affordable solutions.  Once I make the decision to shop with you, don’t give me a reason to reconsider that choice.  Please don’t treat me differently after I become a customer by throwing me over to a newbie sales person.  When I send a new customer your way, recognize that and reward me in return.
  5. Recognize that I wear many hats.  Being a purchasing agent is only one of dozens of roles I play each day. Make it easy for me to get on to other tasks I have by making shopping and paying for your products simple.  Remember my printer types and supply requirements, my preferred payment type and deliver products to me on an as-need basis.  Streamline my interactions with your shop.  I will be loyal even as I quickly transition away from you each time we meet.