Member Article

It’s not just data, it’s customer data

What small businesses can learn from Marks & Spencer

Raj Sond, General Manager, First Data Merchant Solutions

Retail giant Marks & Spencer recently announced that they are in the early stages of developing a new, more personalised loyalty scheme – ‘Sparks’. Instead of a points based system, the new programme will offer tailored deals and exclusives to their members. Whilst this is a great step in improving their customer offering, what M&S have really done is highlight the significance of customer data.

M&S has transformed its image over the years and now they are setting their sights on re-working the way they tackle loyalty schemes. Placing significance on understanding their customers, SMEs could also learn from this and take heed of how vital customer data is in maintaining and exceeding customer relations and expectations.

In a recent YouGov study carried out by FDMS, we found that 66% of customers would leave a store if they were offered goods or services not of interest to them. Bombarding customers with unwanted products clearly has a detrimental effect when maintaining client relations. Whilst M&S has clearly realised the damaging affect that this could have, only 33% of British SMEs acknowledged that this was a negative factor. This is coupled with only 23% of SMEs in the UK currently using data and analytics to assess interactions made with customers. So how can business owners start to address these issues and encourage loyalty from their customers?

Get to know your customer

By analysing previous transactions with customers you can start to pinpoint exactly what each customer is buying regularly, when they spend more money and even what times/days they tend to shop. From this, patterns will start to form allowing you to not only target your customers with products and services you know they’ll be interested in, but also at times they’ll most appreciate your offers. For example if you know a customer spends more than usual on the first day of every month, they’ll probably be receptive to exclusive offers just before this time.

Implementing innovative payments systems

It’s not just in loyalty programmes that customer data can be invaluable, if you’re able to analyse how your customers are spending money, you’ll be able to establish the best payment acceptance methods to take. For example, if you can see the majority of your customers are using their credit or debit card for lower priced transactions, it’s probably wise to think about a contactless terminal. The UK Cards Association revealed that 58 million contactless cards were issued in 2014, with a whopping £380 million spent via this method. So, if your customers buy lower priced goods, and favour their cards, offering them this method could not only provide them with the ultimate convenience, but also speed up the transaction process.

Managing stock

We found that 72% of consumers said they would leave a store without making a purchase if their required item wasn’t in stock. Obviously it’s important to avoid this situation. If you’re able to log transactions and track data, you can also be alerted as to when items are running low and need a top up. Indeed, if couple this with when regular customers shop, and which items they tend to buy, you can start to pre-empt when you will need to replenish certain products and avoid the stock cupboard falling short. Not only does this keep newcomers impressed with your service, but you can also keep loyal shoppers coming back for more.

What M&S have demonstrated is how seriously they take their customers’ needs and preferences. And there is no reason why SMEs can’t follow their lead and tap into this important area of business. At the end of the day customers are the people that keep your business going, so it’s important that you cater to their needs. By taking an integrated approach and harnessing the power of your own data, you can cement lasting and solid relationships and follow in the footsteps of retail giants.

This was posted in Bdaily's Members' News section by First Data Merchant Solutions .