Knowing your customers wants and needs should be fundamental to the smooth running of any business. Saying that, getting closer to your customers doesn’t just mean greeting them at the threshold with a smile, or offering BOGOF deals when you’re trying to get rid of old stock. By utilising your business data, SMEs can stop guessing what customers want and get it right the first time.
Recent research undertaken by First Data finds that a massive 50 per cent of SMEs admit that they only know their customers ‘fairly well’. A further 42 per cent of SMEs say they go on ‘feel’ rather than using insightful data to understand their customers’ purchasing behaviour. Data is an essential component to operations, customer loyalty and developing marketing activities for your business. Why then, aren’t many SME businesses using it to inform their decisions?
Digging for data needn’t be a chore
Running a small business virtually single-handedly (in many cases) is no mean feat. Being responsible for the success of your own business can be a highly stressful, time-consuming and intimidating undertaking. As a result, the day-to-day tasks can often take over and end up holding SME owners back from focussing on more strategic tasks such as improving their customer relationships, creating new marketing initiatives and, crucially, growing the business.
Despite the time pressures, getting to know your business and your customers’ buying behaviour needn’t be a drain. We’re now fortunate enough to have more access to technology than ever before. Business owners can (and should) finally scrap the finger in the air method where they go ‘by feel’ when predicting their customers buying behaviour. We no longer need to make assumptions about what our customers want – because we have technology to give us definitive answers!
Building a loyal army of customers
If SMEs know their customers only ‘fairly well’ they can only engage with their customers ‘fairly well’ – limiting their ability to build loyalty among the customer base. All businesses face stiff competition in today’s online/offline market and loyalty is top of the agenda for the smartest outlets. Playing a guessing game, based on your own preferences and assumptions is no way to build a loyal community of engaged customers. In fact, it’s a sure fire way to alienate your regulars, as no two customers are the same.
By deeply analysing customer data, business owners can start to build a bigger picture of your customers’ likes, dislikes and purchasing habits. For instance, if the business were an independent gift retailer with technology to enable you to view the businesses trading history, they could look at which products sold particularly well in which shopping period or season. Chocolate eggs will undoubtedly sell particularly well in the run up to Easter, but who knew interior furnishing gifts sold well in spring? Decision makers can use these unique data insights into business performance, as a basis for promotions on specific merchandise.
Building genuine loyalty isn’t just about selecting the right products to promote, it’s about providing incentives to tempt customers back to your premises again and again. Data-led marketing activity should be timely and targeted to specific customer groups correlated by their buying behaviour. Loyalty can be encouraged by providing bespoke discounts for repeat custom, no matter the product or promotion – it’s about understanding who customers are as individuals, not as mass marketed-to groups.
Streamline the business function
Collecting data is also useful when managing stock. If SME owners have access to live stock levels, they’re able to see when certain items are running low, making sure they place orders with suppliers in good time. There is no need to risk disappointing customers, and putting off potential new customers, if you stay on top of your stock at all times.
In addition, for time-poor decision makers at SMEs, having the ability to look your business data at the end of the day, from a tablet or laptop, gives them a valuable remote oversight to spot business areas worth paying more attention to.
Access to the business via the ‘Cloud’ enables business owners with around the clock data wherever they are. Cloud-based technology can provide personal benefits – by being able to work remotely, from the comfort of their own home, SME owners can cut those long days at the office/store and have more family (or even ‘me’) time. However despite such clear benefits, we’ve found that 48 per cent of SMEs still don’t use cloud technology.
Now is a great time for SME owners to think about the business tools available to them to help run their business more efficiently and profitably, whilst delighting their customers by anticipating their needs. Having technology as a backbone to the business means that small businesses can flourish thanks to the insights data provides. Diving into your data will cut any costly assumptions made about your customers’ needs, while utilising cloud computing improves the work-life balance of the person with ultimate responsibility for operations, marketing and keeping customers happy. The transparency an EPOS (Electronic Point of Sale) provides will give control back to business owners and ultimately peace of mind – Now that’s priceless.
Raj Sond is general manager of First Data.