|Sumesh K Menon||Sep-7th , 2018||0 comments|
Festival season is one of the most active days in any retailers life. You need to do multitasking never before in these periods, which starts a few months before the festival days. Ultimate points all retailers will focus on in these days are, how to take the Sales graph north or up than the last year.
Let's start with a real story. Tom - owns a small retail chain with 3 stores, selling apparels runs his retail business for the last 3 years. He does average business, but he knows there is a huge potential this year because govt and companies have declared a good bonus for the employees. But Tom is clueless on how to tap this market. He appointed his friend to analyze the situation, and he came up with a few questions.
Tom was completely taken aback and decided to work on a strategy to solve these questions.
If you are in the position of TOM, continue viewing this video.
Let's ponder on few fundamental points, which you can do to increase your business 20% more this time.
1. Start saving customer contact details and their purchase items:
First and foremost, its very important that you know the customer better, especially when your customers are more tech savvy and more informed. Let's say you have 60 walk-in customer per day to your store, and they purchase an average of 500 per transaction. If you can identify individually, you are talking about having some 1800 unique customers per month, which is 20,000 plus customers a year.
Volume - 21600 customers * 500 Avg. Basket - 108,00,000 ( or 10million)
Wow!.. that is a huge number. Have you ever thought you are dealing with this many customers??,
Start saving their contact details. A good retail software will have this option, but you have to do it religiously to get benefits. From today make sure that each customer name and contact details are saved in your retail POS software.
2. Introduce a simple loyalty program
Loyalty is one of the best methods to retain customers, because, it gives them a reason to come back to your store again they get rewarded. Roll out a simple loyalty program. You need a thumb rule on how much you can give away through loyalty ? Generally, Grocers gives anywhere between .05% to 1% as loyalty, whereas the apparel/fashion guys will give anywhere between 2 to 5% on loyalty. Again it depends on the profit margin you have in your products. Be generous in giving loyalty points, because, the best way to expect a good return is by start giving something first.
3. Segment the customers 40: 60 ratio
Once you have the Customer data ready and the loyalty points in place, try to segment your customers into basic two groups, Top 40% contributing customers in the last year, and Last 60% customers. There are different methods to do segmentation, but let's keep it simple. Now you know that you have around 20k customers with an average basket size of 1000. And top 40% of those you have segmented it.
4. Send out a campaign offering a special discount to the top 40% people, as Reward point
Now let's target those 40% of customers and run a campaign. The Campaign can be like, buy for 1000 or more, you get 20% discount only for this selected customers. So here, you are targeting around 8,600 customers (out of 21600). If 30% of them coming back to your store, and avail the discount, you are talking about 2400 customers *1000 bugs (around 2 million/24 lacks).
Review the outcome
After the festival season, if your maths are right, your sales would have increased by around 20% considering the above mentioned are correct. Like, out of general 10 million sales, from this campaign you would have generated 240,00,000 0r (2.4 million) which is around 22% of your general sales.
So let's start working together, if you are interested to grow big, do contact us, we are Reatailbeanlite’, we will help you to provide a suitable platform which will help you to grow constantly. Check out www.retailbeanlite.com