By Michael Stevens, Executive Vice President, Marketing & Innovation, Spindle, Inc.
According to the Small Business Administration, local businesses make up more than 99.7 percent of all employers and create more than 50 percent of private gross domestic product. These merchants represent a formidable opportunity for dealers selling payments solutions.
Each of these merchant’s point of sale (POS) systems has the potential to tap into a treasure trove of valuable information about the consumer’s purchasing habits and preferences. “Big data,” gathered at the point of sale, can provide critical information to help small businesses compete against larger retailers. As such, resellers can leverage marketing data analytics integrated directly into their POS, to help them be smarter marketers and reap a dramatically improved return on marketing investments.
Although big data of this sort has typically been considered the realm of larger organizations, SMB merchants have plenty — if not more — to gain from insightful analysis of their current and targeted customers. Here’s how:
Create Cost-Effective Marketing. Big data allows SMBs to develop hyper-targeted campaigns that take into account timeliness and relevancy of message vis-à-vis the receiving consumer’s tendencies. In other words, smaller merchants can spend less on marketing if they only distribute content to customers whose buying habits make them more likely to purchase the items in question. For instance, a national chain like Best Buy has the resources to blanket 100,000 local consumers with a postcard mailing costing tens of thousands of dollars, yet much of that investment will be lost on households with no inclination whatsoever toward the products being advertised. A more regional electronics company, such as Fry’s Electronics in the Phoenix area, can utilize point of sale data to create a more effective and economical campaign that targets people who are interested (relevancy) and ready to buy (timeliness). POS data can identify local consumers whose buying patterns make them more likely candidates to purchase the merchandise in question, limiting the campaign to those qualified customers. The result: greater ROI on a smaller marketing expenditure.
Make Campaigns Timely and Relevant. Any savvy marketer will tell you: If your content is not absolutely timely and relevant to your customer’s needs, it will fall on deaf ears, and you’ve wasted your investment. SMBs need every dollar in their coffers, so “media waste,” as it is known, shouldn’t be tolerated. The ability to leverage a reliable, organized purchasing history can lessen this possibility. Meaningful market intelligence allows the retailer to cater its messaging to the customers’ real-world preferences and, in turn, reduce media waste and maximize the advertiser’s budget.
Make Data Actionable. To take full advantage of an integrated POS/marketing analytics platform, it is not enough to simply gather data. An effective solution will organize and interpret data and provide relevant marketing suggestions that can quickly be made actionable for the retailer, allowing that company to optimize marketing strategies on the fly.
Capture Customer Insights. Big data is a living organism, changing from moment to moment. With access to effective analytics, independent retailers can capture ongoing, real-time snap shots of their buying public on a consistent basis. Such insights into the customer base are priceless, enabling merchants to accomplish such ROI-maximizing feats as inventory management based on changing buyer preferences, staff optimization based on daily sales patterns, and the use of predictive modeling to shape their business processes.
It’s difficult to completely level the playing field for smaller businesses trying to compete with top-tier national retailers. However, it helps to be able to deliver tools that turn daily purchasing information into invaluable marketing intelligence, information that retailers can quickly act upon to improve business. For an SMB merchant looking to capitalize on opportunities and conduct effective initiatives, a POS system with “big data” capabilities can be a very compelling offering and a critical differentiator for the dealer’s POS portfolio.