Paul Rickett January 2010 Melding Analytics & Intelligence for a Small BusinessA Case Study
Paul Rickett 30 Years in high-tech Sales & Marketing Sales management domestic and int’l Market research for new products Distribution strategy Helps companies use and interpret business data Took over wine management of small market wine store on in 2007 – this is our case study
Our Store Domestic Market c.2800 adults Plus High Season Tourists High season is April to September High month for most wine stores is December, for us its August Small, relatively new in market Established competitor next door Semi-regulated business – no buying power
The 2007 Challenge Wine was our strategic growth product but we didn’t know size of market opportunity Didn’t know much about the customers What they like, don’t like etc. Why they shopped at the store New business owner didn’t know too much about the detail of his business Many people on Island and most especially visitors didn’t even know we existed Business opened in 2004
Business Data – The Foundation Analysing and understanding your data provides a foundation for Measuring Change Refining Marketing strategy Improving Sales techniques Raising customer satisfaction Satisfied customers are Repeat customers Refining product selection Increasing/Decreasing/Changing ...But, its how you use the information that counts!
Key Internal Data Sales By country (e.g. France, Canada etc.) By type (e.g. red, white, sparkling) By agent (importer) Seasonality/Holidays Determines when to increase inventory Certain holidays indicate what type of wine to carry Inventory Turns One of the most imp0rtant statistics for a retail business – inventory is the major source of cash flow difficulties for most
Key External Data Industry statistics Also competitive analysis via observation Census data Population Age Income Alcohol consumption data Average wine consumption in BC Tourism data Hard to find specifics for Bowen
Customer Survey Annual customer survey provides formal stats and customer input (2007-2009) Done every February In-store survey Other alternates like On-line Advantages/disadvantages Challenges with surveys Design and Test Getting people to respond And accuracy of response – people may not like to disclose personal details Are results representative? Limitations and validation
What we use it for Collecting demographics Soliciting email/contact info Consumption habits How much do they drink and how much they spend Customer Satisfaction Competitive analysis (where else do they buy) Qualitative Hours, trends, event effectiveness What they like, dislike about store Assessing market share Prediction e.g. Impact of economy in 2009
Key Points on our Survey How many responses provide valid results? Statistical reliability (e.g. Confidence level) Consistency of questions year over year So we can measure change Quantitative and Qualitative questions Hard data Open ended questions Cannot stress enough the importance of design and testing of a survey before ‘going live’
Analysing Data Results keyed into a spreadsheet Answers are both entered as classified (numeric) and literal (text) depending on question Most data is simply grouped and analysed in percentages etc. Statistical measures we use Simple count, stack and rank, percentages and ratios Mean & Mode, Standard deviation Correlation If a result does not pass the “sniff test”, research before publishing.
Using External Data to Validate Is our data representative? Do respondents mirror population? Use Canada census for local market Test consumption data and patterns against 3rd party e.g. Drinking habits Benchmarking our performance vs other stores Sales/sq.ft of store Inventory turns
Some examples of results Are we doing better according to customers? Increased selection in 2007 Satisfaction Ratio for ‘good’ vs ‘boring/average’ 2007 1.1 : 1 vs2008 5.2 : 1 (up 500%) Are we doing better as a store? Average price per bottle sold 2006 - $16.52 vs 2009 - $17.50 (up 6%) Inventory Turns 2006 < 8 p.a. vs 2009 >12 p.a. (16 in 2008) Are our results accurate with hindsight? e.g. Did our 2009 survey responses on economic impact on buying reflect what actually happened –
Reporting Annual Customer Survey Report Example from 2007 (1st year) Spreadsheet for supplier ranking Monthly Master sales by category/month spreadsheet
What we don’t do.......but should Sales by customer No current way to track this – needs new POS Be nice to know what wine each customer purchased Allows better targeting & promotion Average Sale Improve assessment of seasonal and event impacts Use of regression analysis to better predict sales Capture more precisely sales impacts of marketing
And the overall results Increased wine sales by 60% over baseline 2006 By Improved Customer Service Increased Selection Marketing (print, email and social media) Surveys and attention to business data have helped focus and drive our business Its important and useful