Let me ask you a simple question that I ask my prospective customer at every sales pitch.
‘If you had a budget of Rs.1 lakh each month to increase your revenue through marketing, how would you spend your money?’
What’s your answer? I’m guessing it more or less revolves around the below ideas:
- Newspaper ads
- Pamphlets and distribution flyers
- Offers & discounts through various online channels like Groupon, Zomato etc.
But is that right way to spend your marketing budget? Maybe. Maybe not.
Their is only ONE way to know the right answer. DATA.
By seeing the data, MAYBE you would realize that 50 to 60% of customers don’t come in after their first visit so instead of spending the marketing budget on newspaper ads, focus should instead be on sending tailored promotions & offers to the first time visitors – prompting them to come back and make another purchase or MAYBE you’d realize that new customers have stopped walking in through the door and then yeah it would make all the logical sense to distribute pamphlets or publish offers online.
But here is the nightmare, A customer walks into a store, makes a purchase and leaves the store. ZERO data is collected about the customer & their purchase. So the first thing you need to do is start capturing data.
Once we have the data, the key parameters we need to identify are:
- What is my customer lifecycle?
- Who are my most loyal customers?
- Who are my lost and at risk (almost lost) customers ?
- How many customers am I acquiring? How many of them are coming back?
By understanding the customer lifecycle, you can design your marketing schemes to get them back more frequently within their lifecycle.
By knowing your loyal customers, people that generate more than 70% of your businesses revenue, you can run promotions focussed on increasing their average ticket size and a constant engagement process to make these customers feel valued.
Unfortunately, reality dictates that most customers, even your regulars stop coming back at some point or the other, there are very few that remain loyal throughout. It is crucial that you engage with these lost customers, who will constitute almost 70-80% of the total customer base (Figures are derived from actual data of various stores).
That’s all well & good, but how do we engage with these customers?
This is the tricky bit & requires a bit of planning. One needs to be smart in sending promotions to customers. There have been many cases where customer visits have dropped to a business due to being bombarded with excessive mailers/ texts about offers which are irrelevant. For instance, offering a discount of 10% to the entire customer base may temporarily result in a few more people visiting the store but does not do much to improve customer retention in the long run.
Promotions need be specifically aimed at the customers you want to get back. They need to be data-driven and should be personalised for the customer. By understanding customer purchase patterns, one can easily segment the set of customers into buckets and can devise different promotions for different segments. These promotions can be further combined with various events like festivals, long weekends or wedding season. Such specific targeted marketing will make customers look forward to receiving the relevant offers they receive.
If you do it right, someone might even tweet out your message. Just look at our customer Instapizza’s example below.
— Rach (@ZosoCFC) April 11, 2016
At Xeno we’ve been helping brands collect data & using it to help them spend money the right way. To know more visit us at xeno.in
All I have to say in the end is