Applying technology to boost customer loyalty

Guesswork no longer cuts it. Smart companies are using business analytics software to improve customer loyalty.

By Mary Brandel, Computerworld |  IT Management, Analytics

With this setup, SuperValu no longer needs to know how data will be structured or what questions it needs to ask. "If a query doesn't work, we can just throw it away because the investment is minimal versus weeks and months of development," Story says.

The grocer is already better able to keep popular items in stock by studying out-of-stock data from its inventory management system, peak shopping times from its transaction data, staffing levels from the labor management system and customer perceptions from its "voice of the customer" system. It has determined that certain stores needed to add a midday restocking shift to accommodate the rush of traffic between 4 p.m. and 6 p.m. "Some of this is Retail 101. But before, we didn't know exactly what the staffing levels needed to be at what stores or what the customer perception levels were," Story says.

Analytics also enables SuperValu to engage with customers through the most effective medium, be it email, text messaging, mobile apps or social media, Story says. The old-school approach was to ask customers which channel they prefer; however, it's far more accurate to watch their behavior, he says. So, for a highly digital customer, you increase activity where they respond the most -- maybe text and social media -- and drop it in the media where they're less active, like email and snail mail.

Predictive analytics is the next step, Story explains. The grocer is experimenting with segmenting customers and predicting their behavior by overlaying loyalty-card data with demographic, psychographic, behavioral and economic information from external providers. By seeing, for instance, the effects of the recession on shopping patterns, SuperValu can better predict which customers will switch to lower-priced items during a downturn and proactively market store brands to them. The company is also reaching out to digitally savvy consumers via mobile apps and social media.

"That's the secret sauce," Story says. "Bringing it all together to understand what the redemptions are, how we offered them, through which vehicle, where they [were] redeemed, which [channels] customers are most active in -- and their social media influence if they are a highly connected consumer."

Case Study

Overweis Dairy: Seeing through the customer's eyes

Gut-feel decisions are no longer enough for businesses today, even for a nearly 100-year-old, family-owned company like Oberweis Dairy. Based in North Aurora, Ill., Oberweis operates more than 40 ice cream/dairy stores, a wholesale distribution business and a home delivery business. In 2010, when the company needed to make some changes, it invested in a system from SAS to make sure its efforts would pay off.

Originally published on Computerworld |  Click here to read the original story.
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