Small business case study


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Small business case study

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