Retail Viewpoint: Measuring The Things You Can't Measure
Garden center co-owner Gail Vanik takes a look at customer promotions, and how sometimes good ole' fashioned communication gives you a better idea of what customers really want.
October 19, 2009
You hear a lot of talk within the industry about the things you can measure- the number of customers, sales, transaction count, turns, most profitable items, least profitable and many more. Our consultants and accountants are constantly niggling us to work the numbers and, if you have a good POS system, you can measure most of these things. But what about the things you can’t measure? In a challenging environment, that’s what keeps me awake at night.
Specifically, the thing that bothers me the most are the customers that you may be losing, and why, and how does one measure them? Is it possible? I believe it is, though entirely unscientific, and let me give you a personal example.
Many garden centers do the popular Bonus Bucks program. At our store it’s called Fall Gold and we give out one dollar for every $10 spent. The program began more than 15 years ago and originally you could redeem your Fall Gold beginning on the first day of fall, whatever date that may be, for one week only. The rules - no exceptions, no extensions, please don’t ask.
When my husband and I bought the business, we extended the redemption period to include several weeks and in the subsequent years, we’ve included other trial dates to make the program more consumer friendly and easier to use. Because there are so many snowbirds in our area and retirees that are not here year round, we seem to have settled on the last two weeks in July and the last two weeks in September as redemption periods. That’s what works for us.
But I know some others who have changed their program. Some honor a year round redemption. Some have gone to giving out one dollar for every $20 spent or even $30 spent. Most that I’ve spoken with say that they have only heard minimal grumbling, if any. And that’s what bothers me.
You can certainly measure how many bonus bucks you redeem. But what about the customers who are in the quiet minority who`will say nothing but simply go away never to return to your garden center? So we asked our cashiers to keep their ears open this year and report back what people were saying and some of the comments were quite revealing.
In our area, Fall Gold Redemption has become a much anticipated event. After listening at the registers through the summer and fall, the feeling of our staff was that by opening it up to every day useage, it would become less special and take away from the excitement generated during the two redemption seasons. They also concluded that going to one for $20 would hurt more than it would gain - some customers complained about the “chintzy” programs that others ran.
In this day and age when many consumers are scrambling to cut coupons and take advantage of every discount they can get, although you may be able to justify a price increase to them, we felt that most of our customers wouldn’t appreciate the change of one for $20 in our Fall Gold program. So a word of caution - although they may not say it to your face, they are definitely noticing and talking about it behind your back.
Since we print a different image on our Fall Gold each year, I can, and am, measuring the old versus the new bucks that are redeemed this year. I know that quite a few folks are digging into those desk drawers to use their old ones. But I thought it was almost impossible to measure those folks that would simply go away quietly never to return.
Or was it? So we ran a report off of our POS for anyone who had not shopped with us in the last year and a half. This meant they had spent $0 from February 1, 2008 when we installed the system to September 30, 2009. Out of approximately 7,000 customers on our list, only 23 names popped up and I know that some of those have moved or passed on. That was an encouraging number and those folks that I know are still around will be getting a handwritten note from me inviting them to return. And, when all was counted this year, we redeemed more Fall Gold than last year. That tells me that one of the things I lay awake at night worrying over, probably isn’t happening- or at least in as much as I can honestly measure it. My customers are staying with us, even through tough times.
Obviously each garden center or business has to make the choice about what works for them in their area. We’re in a small, rural community that doesn’t often embrace change well. Let me make this clear- I am not advocating that other centers are wrong by making the decisions or changes that they have made. They know what they need to make their bottom line work. What I am simply saying is that it’s hard to measure what’s not there when customers don’t return. As a business owner, you also have to keep your eye not only on the numbers, but also on the way policy changes affect your customers. If you’ve made a significant change in your programs this year, and sales and traffic are down, it might be time for a second look at how those changes may have affected your customers.
So how does one measure what they supposedly can't? Put aside the accountants and consultants and numbers for just a minute and go back to your basic communication skills. Isn't that what made you successful in the first place? Ask and then listen to what people are saying. Then use your POS creatively to generate something other than the weekly sales report. You'll sleep better at night.
About the author:
Gail Vanik is the co-owner of Four Seasons Greenhouse & Nursery in Dolores, Colo., with her husband Vic Vanik. Four Seasons won the West division of Today's Garden Center's Revolutionary 100 Garden Centers for 2009.