To build revenue alongside a loyal army of returning customers, like the giants of UK retail, small independent retail owners should think about personal loyalty schemes and take advantage of data, writes head at ecommerce solutions platform First Data, Raj Sond.
Turning a “browser” into a buyer and a loyal customer is especially challenging for small retail owners who don’t have the huge marketing budgets of some high street brands, or the ability to offer huge discounts.
However, despite the competitive personal loyalty schemes offered by some household retail brands, smaller firms can still find creative ways to generate customer loyalty.
A recent survey found that 42 per cent of small business owners trust their instinct when it comes to getting to know their customers. While this figure might not be surprising, given how time-poor most small business owners are, it shows a wasted opportunity.
Leaving one of the most important aspects of a business – understanding your customers – to gut feeling alone, is shaky territory, especially for ambitious small retail owners that are looking to grow.
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Find out where loyalties lie
When asked why they would leave a store without making a purchase, 69 per cent of consumers cited poor customer service as a major factor. Last year’s Customer Index Survey goes one step further, finding that 79 per cent of customers would take their business to a competitor within a week of experiencing poor customer service.
Retail is ruthless, and customers have an extraordinary range of choice, both online and offline, so managers cannot afford to be complacent.
In a fast-paced, multi-platform world, customer experience doesn’t start or end when a shopper walks onto the shop floor. Customers want to feel special, and that their custom is uniquely valued, rather than feeling part of a mass targeted group.
By diving into and drawing insights from data, independent business owners can build an accurate picture of their customer base and connect with customers in a much more personalised way. Don’t base your business decisions on guess-work when facts are at your fingertips.
Small businesses are constantly collecting data
The days of manually keeping a paper log of daily business transactions are long gone. Technology collects and stores this information for you – previous purchases, online orders and payment transaction data will all be recorded. Access to this information, and the ability to analyse it will allow business owners to be both proactive and reactive around customer needs.
For example, an independent high street café could apply personal loyalty schemes and promotions to hot and cold drinks as and when temperatures rise and fall dramatically, responding to the nature of customers’ needs on the spot. Likewise, offering quirky campaigns and personal loyalty schemes for significant calendar events are often well received, such as free cups of tea with all sales of cake on the Queen’s birthday.
A quick analysis of which products do well at which times of the year can help you craft fun and engaging personal loyalty schemes to market the business and increase sales.
Build tailored personal loyalty schemes
Having mastered data collection and analysis, with the help of technology, small retail businesses can start building personal loyalty schemes that give retail giants a run for their money. All customers tend to get the same offers on the products the big retailers are trying to shift, which isn’t very engaging and certainly doesn’t build loyalty.
This is where the smaller and more nimble independent businesses can swoop in and show the big brands how it’s done. For example, create a loyalty scheme unique to each customer’s buying behaviour. If your data is showing you that one of your customers comes into your store for the same product every fortnight, you could think about offering them every third purchase at a discounted rate.
This is genuinely appealing to the customer as it’s something they will need at a specific time. Who needs unwanted “buy one get one free” on multipacks of yoghurts anyway?
Knowing your customers’ likes, dislikes, needs and motivations will enable you to get to know them, their preferences and shopping behaviour better than they know it themselves. It’s this innate understanding that builds relationships and spurs trust in your service, resulting in increased loyalty.
Utilise the data your business is already collecting to the benefit of customers and the business. Getting these foundations right now is the key to success in the long-term.
Raj Sond is general manager at ecommerce solutions provider First Data
Read more from the Business Advice High Streets Initiative:
- Smartphone sales buck downward trend in retail spending
- High street retailers urged to meet consumer demand with same-day delivery options
- Yell and Facebook forge local advertising product
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