Use Customer Data to Increase Sales and Profitability
As a convenience store owner or executive, you know that selling another tank of gas won't drive your bottom line. You need to get your gas-buying customers off the island and inside the store to purchase higher-margin items. And even more importantly, you have to find additional, new customers just like those high-margin customers and ensure new stores open in locations that provide access to them.
Start the process by deepening your knowledge of your most-profitable existing customers, so you can more precisely match your merchandise mix to their needs. At the same time, you have to get an objective measurement of the sales potential those customers represent within each store's trade area.
Truly knowing your best customers requires understanding their measurable psychographics at a household level. Which of your potential best customer households would like to save a trip to Starbucks by picking up a cup of coffee at your c-store instead? Would they skip a liquor store run by grabbing their favorite six-pack at your place instead? If so, should you be stocking Tecate or Anchor Steam?
While there's no substitute for the instincts and boots-on-the-ground perspective of your own trained marketing and real estate teams, their performance and accuracy can be dramatically supercharged when they're empowered with "always on" access to household-level data models customized for your c-store.
Whether your company owns 250 convenience stores or just one, you can develop a profitable relationship with a "big data" partner. In fact, here's how advanced customer analytics can help three very different kinds of convenience stores:
• You're large or advanced enough to collect transactional data on your own through a loyalty card program and other data collection efforts. If you already gather this information, you're starting from a position of strength, but you may not be maximizing your return on it. Once you combine your transactional data with sources of national, household-level demographic and psychographic data, you can really bring your customer profiles to life.
• You don't have the same level of customer information that a large chain might, so you're looking for assistance. Companies can connect you to consumer information and household-level data from many sources, and study your trade areas to help pinpoint your marketing and merchandising efforts down to the local intersection. Once again, you can instantly translate this information into highly profitable remerchandising and marketing efforts.
• You're a "mom-and-pop" store with little or no data collection. Don't assume working with a company is too expensive. Companies can help you move from "going with your gut" to using predictive models that will enhance your future performance. Single-store owners can still use research to learn about high-concentration households and their purchase patterns, and then use that to help plan a merchandise mix or open a second store.
The bottom line is: No matter how sophisticated your company's existing data, the quickest and surest path to maximizing customer share of the wallet is finding an analytics partner that can access the household-level data sets to truly show you who your customer is, and what those customers want from your store.
So, no matter whether you're a chain with hundreds of stores encompassing rural and urban locations across the country or you're a single-shop entity in your hometown, you can benefit from some well-executed analysis of your customers and your trade area. You'll move more-profitable product off your shelves, put more money in your till and provide a better service to your customers -- both new and existing.
Curt Woods is chief customer officer for Buxton, a provider of market planning and marketing services, where he leads all customer-facing teams within the organization. His role includes implementing Buxton's customer-centric strategy and driving growth through new market opportunities. Prior to joining Buxton, Woods worked for the Dr. Pepper Snapple Group for 20 years. He held a number of leadership positions within the company, most recently serving as senior vice president. He received his undergraduate degree from San Diego State University and earned his MBA from the University of Phoenix.
Editor's Note: The opinions expressed in this article are the author's and do not necessarily represent the views of Convenience Store News.