How Your Salespeople May Be Diluting Your Rate

“I think we have a promotion I can give you!”

By Joni Newkirk - CEO, Integrated Insight

It happened again last weekend.  While I am thrilled to have traded my old iPhone 3G for a brand new Samsung Galaxy 4 for just $6, I still cringe when I think about the transaction.  A very competent and beyond helpful sales person offered me not one, but two special promotions.  Promotions I did not know about before entering the store, nor inquired about once there, just offered up in the context of being helpful.  And it happens on a regular basis at the grocery store.  I’m often asked if I have any coupons and the answer is always no.  But sometimes, I happen to buy something that is indeed listed in that week’s promotional flyer and almost always, the cashier feels obligated to find the coupon in her pile and use it on my purchase.  No asking required.  Just being a helpful cashier.

This is pure dilution for the company.  While one or two items at the grocery store may seem insignificant, over the course of the day and across many cashiers, it adds up.  In the case of the phone, it was a quick loss of $150 in just 30 minutes.  I walked in knowing what I wanted.   I wasn’t shopping price, hadn’t been elsewhere, and didn’t even have a contract to worry about - just needed a new phone with as little hassle as possible.   On the other hand, “save the sale” tactics can be quite effective if executed well.  On the same weekend shopping trip, our purchase of outdoor furniture included a “save the sale” item which the salesperson played like a pro.  Without squelching their desire to be great salespeople, companies need to make sure their employees understand the why behind basic pricing and promotional offers.    Consider the following for starters:

• Advertised promotions are designed to drive new customers or more frequent purchase from existing customers.  Those who are motivated by price will find the promotion and take action.  Those not motivated by price are unlikely to feel slighted if not offered something they knew nothing about, and surely do not expect you to do coupon clipping for them.
• “Save the sale” tactics are not promotions.  Use them sparingly and only when the sale is actually in jeopardy.  First offer the most logical choice or better, and revert to a lower price option only if the customer balks and is prepared to leave.  Let the lower price be driven by an alternative item, not just by dropping price.
• Unadvertised “promotions” have the greatest potential to backfire, calling into question the company’s price integrity.  It was after the “promotional offer” was applied to my phone that I began to feel as though I wasn’t paying a fair price to start – all because of the way in which pricing was manipulated on the fly.  Despite the great price on the phone, I no longer felt in control.

Effective promotions generally deliver on all of the following:

• Lend themselves to compelling marketing messages.
• Target specific audiences and time periods.
• Are fenced to avoid dilution.
• Have a strong sense of urgency.
• Can be yield managed.

Share your insights on pricing with your front line team.  The more in tune they are with your pricing strategy, the better they can help grow the business. 

Big Data is a Big Deal

By Sue O'Shea - Director, Integrated Insight

“Big Data” is a big deal.  It possesses one or more of the following characteristics – high volume, high velocity, or high variety and comes from sensors, devices, video/audio, networks, log files, transactional applications, web, and social media - much of it generated in real time and in a very large scale. Businesses are all collecting, organizing and analyzing data to some degree, but how do companies get the sheer volume under control and mine the data? Big data is only useful if you know how to analyze and glean insights and put the insights into action.  If not, it’s just another report on the desk.

Wired Magazine offered the below insights to help understand the clues that the data is providing.  Among the insights are:

• Treat Your data as a ‘Gold Mine’… and Mine the Gold –   Collecting this valuable information is the first step in truly understanding your customers’ experience.

• Don’t Always Assume You Know What Your Customer Wants or Needs – Allow the data to provide insight.

• Focus on Quality of Your Data rather Than Quantity – Focus on the data that matters most.

• Be Agile – You technology must be agile and able to adjust as quickly as your customers change their preferences.

• Your Business Operates in Real Time – So Should Your Analytics – The ability to gain insights into your customers’ experience and behavior in real time allows you to understand what’s happening as it’s happening.

• The Data is Yours, Use Every Bit of It – It is the granular information about your customers’ behavior and experience that will render the most valuable insights.

• Look at the Full Picture –Enrich data by correlating it with other data that resides in different data stores to make sure you are able to “connect the dots.”

However, before embarking on a big data quest, IBM, a provider of big data IT solutions, recommends getting these things right first:

•  Build a culture that infuses analytics everywhere. Empower all employees to make data-based decisions, instead of relying on instinct and past experience.

•  Be proactive about privacy, security and governance. Ensure that the data being analyzed is safe, secure and accurate.

•  Invest in a big data and analytics platform that is tuned to the task of handling all types of data, regardless of form or function.

Big data has the power to help companies gain a full understanding of customers—what makes them tick, why they buy, how they prefer to shop, why they switch, what they’ll buy next, and what factors lead them to recommend your company to others.  If done correctly, it can help marketers not only make better decisions but more profitable ones for their companies.

If you want to learn more about Big Data, take a look at www.bigdatauniversity.com.  The website offers a variety of free and fee based courses by experienced professionals and teachers.

I Spy...

By Lori Georganna

Chances are you have played I Spy, either as a child or with your own children to keep them occupied during a long trip. Beyond the distraction benefit, this game helps to build children’s observation skills. These same observation skills can help you uncover opportunities with your employees and customers. It requires slowing down, observing what is around you, taking notes on what you see, and discussing it with your employees and customers.

Marcel Proust, French novelist, said it best: “The real voyage of discovery consists not in seeking new landscapes but in having new eyes.”

Here are some ideas to get you started.

• Watch your customers while they are shopping or interacting with your product or service. What do you observe?  Note what they are doing and what is happening around them that may be impacting their behavior or mood?
• Play undercover boss. Employees who deal directly with customers have a lot of insight as to customer needs and behaviors. Step into front line roles periodically for a firsthand experience with customers. You will appreciate what your employees do and they will appreciate you even more for walking in their shoes!
• Be the customer. Go through the journey your customers take with your company. Make sure to take notes of any frustrations you encounter. Also note what your company does really well.
• Hire an objective observer or ethnographer. Sometimes we just can’t get out of our own way or we need an external partner for credibility.

Once you have some ideas, either on how to improve the existing experience, or for a new product or service, call in your market research experts if needed. Some ideas should just be implemented – either because they are low cost or it makes business sense. Other ideas may need additional exploration and research to determine if they will have the desired impact.

For more tips on how to up your observation game check out these links:

http://everydaylife.globalpost.com/improve-hyper-observation-skills-28842.html

http://lifehacker.com/5960811/how-to-develop-sherlock-holmes+like-powers-of-observation-and-deduction