The days of big data are over, as we learnt in our previous post, embracing your small data is the most effective strategy for market research and a proven cause of business success.
Transactional data is a simple and obvious source of quality information for your business. Simple insights into what your customers are buying or not buying, whether they buy discounted or full price items, the times of day or location of their purchases and the devices they are using to make them sitting somewhere in your data files. They are invaluable in helping you better understand the types of customers you should be targeting, the products they want and the offers the will change behavour.
The information that already exists in your web analytics, CRM or POS systems will most likely allow you to retrieve the granular insights needed to identify your most profitable or promising customers. If the message, and its timing, is right the chances are you could improve your sales conversion rates considerably.
Transactional data is also useful in revealing insights about purchasing trends across longer timescales.
Loyalty programs are a vital part of retention strategies and, for most companies, it’s more cost effective to retain a customer than acquire a new one.
Loyalty programs collect large amounts of data, from the location of purchase through to frequency, demographics and so on. However, customers benefit the most when the loyalty program uses data collected to improve their experience with a brand in a meaningful way. It’s easy to become wrapped up in the idea that it is only sophisticated data that holds value to the brand, yet some of the best-used programs are the simpler ones, like the paper-and-stamp method used by so many cafés.
Take Starbucks, for instance, and how it integrates its loyalty program with other data collecting initiatives, demonstrating that even coffee shops can go beyond paper loyalty cards.
Membership programs are nothing new, but Starbucks has mastered the system. The company created a loyalty rewards combining purchases within the family of Starbucks products. Members earn “stars” on everything from coffee, to food, CDs, books and accessories, from grocery store purchases to purchases at offshoot chain Teavana.
A fabled Starbucks gold membership not only captures your favourite caffeine hit, but detailed information around a wide number of consumer behaviors, that are happening already within the chain’s eco-system/
Starbucks has begun to roll out its rewards system in the majority of its markets, including China. In two years the company has built a base of more than 3 million members in the U.S., and they now account for 35% of transactions in its stores.
There’s a lot of information you can obtain by properly linking the loyalty program with your POS system to track purchasing habits, which many retailers are not currently doing, and then wondering why the card is not being used.
Those companies taking advantage of the data sources already at their fingertips are the ones able to easily and economically identify and solve customer problems to improve their experience and drive sales.
So don’t get swept up in the big data hype, small data can be just as effective in steering your business to success. And the chances are the information is already at your fingertips. You just have to unlock it!
For further insight, please see our Gloria Jean’s Case Study