Have you heard of the Pareto principle? In the context of sales and marketing, it says that 80% of your profits come from just 20% of customers.
Even over 100 years after its conception, this concept is still as relevant as ever. It highlights the need to give your top customers premium treatment, while making you think critically about how to treat the other 80% to drive more profit.
A retailer’s point-of-sale (POS) is the hub of every business action, wherein sales, marketing, inventory, customer management and customer service merge. But what many still don’t realize is its powerful role in unlocking customer loyalty and higher revenue.
Champion customer experience
Long transaction times are a common customer frustration. With a modern and flexible POS, you can drive speed while processing more customers at the same time, significantly improving the customer experience.
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Your POS should also allow you to set up different payment options. Modern consumers are by far a uniform group and prefer different payment types, including credit cards, digital wallets, PayPal, or cash. The more options you offer, the more people you’ll be able to please.
Technology allows you to incentivize those repeat customers, ending every transaction on a positive note. So don’t forget about follow-up communication: That may mean including a small surprise with every order, like a discount for a subsequent visit, or just an extra “thank you.” Your POS’ reporting tools should allow you to segment that customer data for appropriate followup.
Why hyper-personalization is key
By connecting your in-store POS to your e-commerce store, you prevent having two different customers’ profiles and instead create a 360-degree customer view, getting the opportunity to really know your customers and understand their shopping habits and preferences. This is an important step in speaking to your customers in a targeted way.
Ninety-one percent of consumers choose to shop with businesses that offer personalized and relevant marketing and offers. That’s why tailoring hyper-personalized messages and recommendations with a comprehensive loyalty program should be your priority, as these customized communications ensure that your customers stay routinely engaged with your brand.
With your POS’s custom reporting features and built-in customer relationship management (CRM), you can collect diverse types of data and segment your customers to create highly tailored experiences.
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Look at your highest spenders and consider inviting them to exclusive in-store events; report on your high-volume sale shoppers and make sure they receive first notice of any upcoming sales or promotions. This way, you incentivize different people in the ways that are most meaningful to them — something that encourages loyalty in today’s competitive retail environment.
Powerful analytics to optimize offerings
POS data should be leveraged in making all business decisions. Retailers can use inventory reporting to observe trends from last season and incorporate these insights into future buying and planning, allowing them to design a strategy that is in line with customer preferences.
Likewise, POS data is critical for merchandise planning. Sell-through and sales-by-margin reports can guide your prices if a product isn’t selling quickly enough and allow you to pivot accordingly.
If you have multiple stores or warehouses, a POS can help you connect these and make easy transfers whenever necessary without disrupting the customer experience. Having too much on hand means you may be forced to offer deep margin-hitting discounts, while not having enough risks losing disappointed customers.
POS isn’t merely a touchpoint of your customers with your business. When you take advantage of its powerful features, it becomes a tool that helps you understand your customers, improve their experience, and ensure that you’re ready to cater to their needs.
Emily Fanning is content marketing manager at Springboard Retail.
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