When diving into data analysis for your business, the sheer volume of data can be overwhelming. Having a better understanding of your data so you can identify how to target your consumer is essential. There are many tools available for market insights: consumer tracking data, government data, internal sales data, industry association data, POS. In this article, we’ll focus on how tracking surveys can give you a wealth of information about customers and give you a competitive advantage in pursuing potential customers to help move your business forward (for more on the others, click here). By using tracking surveys like TraQline, you are able to track, monitor, and compare behavior and market trends to create significant value for your company.
Tracking and Monitoring
An important component to understanding your customer is to recognize your customers’ purchasing behavior. Every company should be tracking and monitoring their customers’ purchasing behavior over time to identify movements and market share trends. When looking at the changes in market share for you and your competitors, you can identify if particular competitors are gaining or losing ground. Consistency over time provides great insight in comparing price levels and market share trends. Here are some key measures that you can track over time:
Market Share – Every brand and retailer can look at comp sales. But while it may be great to see that you’ve grown your sales volumes by 15% vs. last year, if the market grew by 20%, you may be in trouble. Market share takes into account market growth as well as your growth and provides a scorecard for performance. As an added, and possibly more important, bonus, not only can you track your performance, but also your competitors as well. Add in the ability to track up-and coming brands and this metric is indispensable.
Pricing trends – a quick look at unit shares and dollar shares will often reveal a disparity between each. A higher unit share compared to dollar shares highlights lower than average industry pricing. This insight can help you understand positioning of competitors, retailers, or brands – giving you valuable knowledge about what gaps might exist for your products.
Online performance and mix – Amazon isn’t the only retailer selling online. Recently announced, Microsoft and Walmart are teaming up to grow online sales. Best Buy, Lowe’s, Sears, even manufacturers are selling online. Monitoring this trend and the changes will help you ensure your online strategy is working against others in the industry. For example, if online sales are cutting into the market, you can redirect your strategy focus more on online advertising and e-commerce applications.
Draw (Consideration) Rate – Obviously, if consumers don’t shop your store, they’ll never be able to buy your products. Draw rate provides hard data on what percentage of buyers for a category are shopping your brand/store. Measuring over time allows you to measure the long-term impact of promotions, store additions, and strategic changes for you and your competition.
Close Rate – What happens to the consumer once they’re in your store? Hopefully you close the sale. Close rate measures the % of your shoppers who end up purchasing. Use this metric to quantify the impact of in-stocks, salespersons, pricing, and strategic changes.
Brand penetration – having insight into what percentage of a retailer’s sales is devoted to each brand can be a critical component in determining where a potential brand or feature might fit into the product lineup. When looking at this penetration over time, retailers and manufacturers alike can identify shifts in brand alliances, thus proactively implementing measures to ensure your store or brand has just the right mix.
Incidentally, TraQline’s quarterly reporting covers all of these key measurements and more. If you’d like to learn more about the data TraQline can provide, check out our Deliverables page.
More about online: Analyzing Shoppers’ Online Behaviors
Beyond measuring share and trends for online mix, understanding online shopping behaviors can further lend to understanding and address your brand positioning. When you have a buyer persona established for your ideal customer, determining where and how often those shoppers are shopping online can help you determine how to increase your market share. Are you losing ground to online consumers? If so, figuring out where and why they are shopping online can help your marketing strategy.
This kind of analysis should look beyond raw numbers to give context to the reasons consumers provide for shopping online. Are they merely browsing online or are they purchasing online? The distinction between your draw and close rates becomes vital to understanding these reports. Analyzing prices paid, units sold, and their effect on your pricing and marketing models is essential for you to understand the degree to which online retailers represent genuine competition to your business.
Analyzing Market Conditions
Looking at the stability of the market and your customer base is critical to understanding the level to which you need to manage your business. Repeat customers can help identify brand strength. Looking at data of your own customers can determine whether or not you need to do more to retain customer loyalty to your business. But a tracking survey can identify whether customers shopping around more or purchasing less of your products or services relative to your competition? If so, you may need to refocus your strategy based on data about how consumer segments are buying.
In a broader sense, looking at the data on market changes is beneficial to your business. For example, if a competitor (or one of your retail partners) has gone out of business, you may have an opportunity to target their former customers. Understanding who these customers are, why consumers shop at other stores, and what brands are sold there can provide critical insights into what retailers stand to gain share from another retailer’s loss. Looking at the overall market condition gives you a chance to prepare for the future and identify any potential problems.
Identifying Market Opportunities
Of course, market conditions do not just speak to defensive needs. If you identify gaps in the market, you can turn those into offensive opportunities for your company. These can include an underperforming category or an opening for a product or service at a particular price point. Either way, if you identify a market opportunity that is underserved, you can move in and direct your marketing to help bolster your market share and general positioning.
Beyond looking at markets in which you already serve customers, you may benefit from looking at additional market opportunities. Are there areas in which competitors have found immediate success or lasting failure? Either of these can speak to the benefits of you expanding into those areas. Looking at opportunities in the market can inspire you to not only fill out your own market opportunity but to grow into others that may not even hold a direct competition for you.
Keep Moving Forward
Analyzing data is an important step in learning more about your customers and how to target their purchase process. Identifying your customers’ purchase behaviors will help you have a better understanding of your market and be able to shape your marketing strategy to be more effective and cost-efficient. The more you can implement data analysis – specifically tracking survey data like TraQline – into your marketing approach, the stronger you will grow in the long run.