Inventrak Blog

Generally, there are three data sources for retailers:

Transactions and Tenders - point of sale information. Access to basket contents and associated tenders is vital to the customer-centric data warehouse. By recording each transaction of a customer who signed up into the database, a retailer collects every detail about the historical buying habit of the customer.  Moreover, if an item is promoted, it is nearly impossible to understand the true effectiveness of a promotion unless it is possible to understand whether that item sold more, the impact of the promotion on the typical basket contents and who responded to the promotion. Recording customer information to transactions and their line items constitute the basics. 

Call Center, Surveys, Internet Postings - real customer feedback. Call center data contains notes fields where customer service representatives can document the qualitative nature of calls and richer content regarding how often customers call, their moods and other information that can hint at systemic problems that make customers unhappy. Along with survey data, this is "trusted" data, meaning that there is some fidelity to the relevance of the source and that is from actual customers or prospects. Internet feedback, now much more common, can be a way to augment these data sources. It is not quite as "trusted," because of the anonymous nature of the Internet, but can still be influential in a customer's perception of or reaction to a retail brand and shopping experience. 

Loyalty Accounts -feedbacks from loyalty program such as gift registries. These data are obviously very helpful in attribution of characteristics to these customers.

These are the three general sources to obtain data for customer-centric database.  It is true that there are more sources, for examples, retailers can study the characteristics of a selling geography from the Census Bureau and estimate the customer behavior in the region.  However, retailers can directly communicate with customers at these three touch points other than through a third party.  Data from these resources enable retailers to build a reliable customer-centric database with accuracy.

The retailers that strive to understand their customers are likely to be more responsive to customer demand, spend marketing dollars more wisely, leverage their multiple sales channels more effectively and ultimately drive more loyal behavior from their customers.  

Thus, constructing a customer-centric database from which customer behaviors can be tracked and analyzed is vital to retailers.

A customer-centric database should have at least four subjects listed below:

Customer quality

Retailers want to know who are their best/worst customers. Analysis of frequency and monetary of a customer is always central. By analyzing certain aspects such as time of last visit, sales/margin of his baskets and frequency of visits, retailers can get an idea of the overall quality of a customer.   

Customer Satisfaction

Retailers need to know what customers think and feel about them. Analyzing the feedback from in-store customer service, surveys and call centers helps retailers understand the issues that positively or negatively affect brand impression, shopping experience and overall satisfaction. These data are consisted of structured data (customer attributes) and unstructured data (call notes) that customer service representatives can be mined for insight.

Promotion Impact on Customers

Retailers wish to know what kinds of offers are most interesting to customers and which promotion campaign is most effective. By looking back of the historical data about promotion campaigns, retailers are able to see the campaigns that would mostly interest customers. With modern information technology, retailers can even develop marketing strategy target certain customers.

Loyalty Program

Retailers always do their best to retain customers. They are also eager to know if their effort on these loyalty programs really works. Most retailers are lack of enough customer-specific information to do anything meaningful. For those that have these programs, it is vital to tie transactions and other customer interactions to the customer's identifier. In this way, a retailer is able to tell a loyalty program customer's response to certain loyalty benefits. Comparing customers who are part of a program versus those who are not is a basic analysis to determine the value of the program itself.