By William Beresford, Strategy Director, Beyond Analysis
Now more than ever CEOs need to know what is going on in their business. The finance team can tell you that things aren’t necessarily going as planned, but typically can’t say why and what to do about it. More pressingly, strategic choices need to be the right ones that can be delivered in a cost effective way without costing the earth.
The economy is going through a huge state of flux and this is having a dramatic shift in consumer behaviour. Staying on top and understanding how this is affecting your customers is crucial to making the right decisions and setting the best strategies to reflect new trading conditions.
The businesses that are best prepared responded a long time ago to this down-turn. Some have been so ahead of the game they have even had time to launch entire new product ranges. They have been using their data to track who their customers are and what matters to them; this has enabled them to react ahead of the curve. However, even they probably did not predict the severity of this down turn.
For many businesses, they haven’t felt the need to really get close to their customers. The appetite for spending has been so great it has been relatively easy to pick up customers with tempting offers and some good credit terms. This simply isn’t the case anymore and many businesses are left looking at a customer base that doesn’t really have any loyalty to the brand at all. Previous purchases were simply just transactions.
Traditional responses using a combination of gut feel, un-representative focus groups and market research based business plans are not going to win in these new economic times. Why? Because you can bet that there is a smarter, more innovative organisation out there that is also after your customer base and knows more than you about your customers.
Whilst big changes like introducing new product lines can take time, much can be achieved through making small changes to what you already have, supported through better insights. This is more about “Make Do and Mend”, getting more mileage out of existing assets and repairing what isn’t working as well as it used to, rather than making big new investments.
In reverence to wartime Britain and the “Make do and Mend” attitude inspired by the consumers of their time we have created our own suggestions for consumer businesses in 2008.
1. Run a Healthcheck over your business. Understand which customers are supporting your business and will remain loyal to you through the slow times. Identify what your loyal customer base has been buying from you and what is important to them and focus on this. Many businesses have spent the past years wooing any old customer in through their doors with cheap price led promotions. These are purely transactional customers and if they haven’t left you yet they are sure to do so. Identify which products and services are driving the wrong behaviour and re-prioritise investment elsewhere.
2. Return on marketing investment. Before you go out and buy more media, the business should crack on with tracking and monitoring which media channels are driving the best bang for their buck and the best type of customers. Some simple steps can go a long way to really being able to see what gives you best return and ultimately how to optimise the spend of a limited budget.
3. Price where price matters. Target your pricing and promotions to the products and services that matter to your best & loyal customers. Minimise margin erosion and wastage through attracting the wrong customers and reap the rewards of recognising the ones that matter.
4. Be relevant to the right customers. If you are going to up your marketing spend, or modify your ranges to combat the down turn make sure your team are targeting the right products to the right kind of customers. Too many businesses are still deploying a one size fits all strategy. Localise your offer to suit the needs of the local market.
5. Review your loyalty programme. Now is as good a time as any to really check that your investment in loyalty is a) worth it and has attracted a valuable base of loyal customers and b) working as well as it should be to optimise your investment. Many businesses have invested in loyalty schemes that are either too costly or simply not aligned to the needs of the business. Now is a good time to make these changes.
In short, your loyal customers are like a pair of good old socks – if you take care of them and darn the holes as they appear, they’ll continue to give you good service long after your discount pack of 5 have been thrown away.
About Beyond Analysis
Beyond Analysis is a leading customer insight and strategy provider that has developed a pragmatic and flexible approach to deploying data to drive competitive advantage through more informed decision making across business operations.
Bringing hands-on experience of developing world class customer insight capabilities for some of the world’s largest consumer brands we can quickly and effectively identify the levers that will harness the power of data.
We are based in London and Sydney.
About the Author
William Beresford, Strategy Director
Will has extensive C-level experience in strategy and media, he works with our clients to bridge the gap between their business challenges and what the data is telling them.
He divides his time between advising the Boards of some of the biggest blue chip companies and developing innovative approaches for the application of data.
He previously held senior roles at McKinsey, Cap Gemini, eBay UK, dunnhumby and Leo Burnett/Publicis (Australia).
In his spare time he indulges his passion for garden design.
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