We’re all wrestling with the UK’s challenging economic outlook right now, off the back of two unprecedented years. We’re not going to dwell on yet more bleak stats, but rather highlight that the solutions lie in your customer data. This article shares some of the different ways you can use your data to help you be more focused and efficient.
By having a deeper understanding of your customer economics, you can move forward with confidence, take out the guesswork, and make informed decisions for your business.
Prepare to lose some of your customers, but keep the right ones
Even in good times, you can’t retain everyone. In today’s economic climate, it’s likely that more customers won’t return. How will you ensure that those you retain are the ones that count?
Understanding the different segments of customers currently on your database can help you to understand who you should be concerned about losing and allow you to focus your efforts on them. The chances are that you should be spending more to retain them.
Review your products and categories
Understanding how your current customer base interact with your portfolio of categories can allow you to understand where you can pull back your range if needed.
Are there products/categories that only ever bring in un-loyal or low value consumers?
Are some categories key in bringing in or retaining your most loyal customer base?
Overlaying this with what areas of your business are facing the most pressure from increasing prices, you can identify the areas you can pull back with the least impact to customer loyalty.
Keep on top of an ever-changing environment
Revaluate your forecasts frequently - it’s no longer good enough to set a forecast at the start of the year and assume that it’ll hold going forward. As so much changes around you, and in your customer behaviour, you need to be constantly reassessing how that’s going to impact you going forward.
Check your channel strategy for incremental impact
Like the above – putting the focus on the customer in your measurement is key. With so many different channels and communication strategies it’s easy to look at them all separately and feel like they’re all working. However, at times when things are tight, look at the wider picture of everything a customer is receiving to see where you can pull back on your marketing budget as some channels may not be driving incremental benefit.
Don’t assume all customers are the same – averages are your enemy!
Looking at the top-level trends of data can be tempting as it gives a simpler view, but it hides a lot of the detail of what’s really happening in the business.
The overall picture might be down but there may be pockets of customers that aren’t – understanding who those customers are and how you can leverage them/what you’re currently doing for those customers different to others can help build a strategy for your wider base.
Promos for example may not need to be sent to all customers – taking a more granular view to understand who is continuing to shop without them and who needs a promotion to drive an incremental order can avoid giving away unnecessary margin in a time where you’re already feeling the pinch.
If you’d like to find out more about how to use your customer data in difficult times, join one of our Teach-Ins, exclusively for DTC founders and leaders. More information here: https://bit.ly/more2ceoteachin