Consumer Behavior 101

Consumers, consumers, consumers in the land of consumption. How do we get a consumer to consume? What exactly is a consumer? Why do I care? 

A consumer is a human begin, that needs to make a purchase or consume a product or a service. Consumers can be individuals, families, businesses or public institutions. 

All decisions we make, not just purchasing or consuming of 'things,' are influenced by our environment and our culture. Technology has been changing how we make these decisions and where we place value and weight to make those decisions. Brands try and represent a particular personality that will entice consumption and influence these markets.  

There are 3 Stages that a consumer moves through when making a decision, where the marketer and consumer engagement in different stages of their relationship. 

1) Identify an Issue (for those entrepreneurs out there, what problem are you solving?) 

2) Make a Purchase and Reflect (customer experience)

3) Disposal 

Basic Consumption Process

Value motivates the central aspect of a consumers behavior. Value is such a buzz word these days, business objectives are being defined where we want to provide perceived value to the customer. Defining value can be challenging and can take many forms. The primary identification of value is the price but can be interpreted in service as well. There are two types of value, the utilitarian value where there is a functional value when solving a problem, or hedonic value where this is more about pleasure and gratification (hello impulse shopping!).

Consumer behavior will change based on segmentation, and lets emphasized geographic segmentation. Perception of brands and how a brand can help define someone's identity will vary based on lifestyle, religion, culture, and environment. How does marketing fall into this? Can the producers persuade us to want something we previously didn't? Is that how insurance and diamond rings came to be? 

The value will be determined differently depending on where you are. It is up to a business to provide value at every interaction with a customer. It is cheaper to make your current customers happy as opposed to acquiring new ones, that is because your client base will contribute reoccurring revenue and upsell opportunities. The product or service attributes also add value, those product features that give a wanted benefit. 

Data and Where to Find Insight a la drilling down

Hierarchy, data access, and connectedness are the three adjectives I would use to describe data management. Data management is, in a sense, how you organize your closet. 

How you sort your data depends on what you are trying to accomplish. Just as you dress for the job, you want. If you can group it, you can discover things. When understanding customers more, regardless of the industry, ultimately the basics are the same. At the root, understanding geography (where customers come from), people (age, sex, culture), economics (infrastructure, GDP and GDP per capita), and behavior (what people buy, where they spend their times, and lifestyle). The difference is, we use data instances to measure it, manipulate and compare it to develop an understanding to make better decisions. 

Every industry has different jargon that explains groupings. This information graphed gives understanding into the why's, and the comparisons. Hierarchies are how management can allocate responsibilities and measure performance.

You can arrange more than just employees. Products and quantities that have information about costs, margins, and volumes sold. By taking data and putting into tables, and grouping things with filters. Columns allow you to group data and 'things,' rows allow you to drill down.

A fashion lover learning the beautify of the data analysis. The world seems to complicate data so much, but it is simple at its core, it's the mind that complicates it. 

The meat of the Dashboard Potatoes: Best Practices

A dashboard is great, but only if there are specific actions that can be taken after reviewing the information. Do dashboards need to be designed with the user in mind? Who will access use the information? What will the dashboard be used to monitor and what questions will the data visualizations answer? 

What makes a good dashboard?

- Simplicity (has to be easy to use, and there's no need for bells and whistles. Group data to organize with the most important items)

- Standardization (how else could you make comparisons)  

- Data quality is a must (if you're reading the wrong data, you're going to make the wrong decisions)

- The degree of analysis (do you need a high level or deep dive into the data?)

- You can print it, share it and see it on various devices

- Colors and charts make things easier to understand  

- It's dynamic, so users can drop down to understand where the information is coming from and it becomes interactive

Things to think about when creating a dashboard: 

  • How often would you like to update the dashboards? Hourly, daily, weekly, annually? 

  • The level of capacity of the users 

  • Whose reading the dashboard? 1 user or a group of users?
  • Is this quantitative or non-quantitative 
  • I would say here the technology platform, but let's be real, it's all about that Cloud
  • What metrics are you trying to understand? 
  • What are the top 3-5 decisions to be made from this data

The data management perspective is done with a flat file ( a simple excel file) or a pivot table. A flight file will require manual addition of formulas and calculations. Pivot tables make it easier to troubleshoot and manipulate data. 

Big Data is Making Waves

"This is a game changer."

"What a competitive advantage."

"The ROI will be so big with insights from big data; it will hit historical numbers, management will be talking about this implementation for years."

These are a few things that come to mind when thinking about big data.  How to run leaner, in an industry where big companies are having to reinvent processes to stay abreast with disrupter startups and enterprises. What are one thing larger conglomerates in manufacturing, specifically heavy industrial businesses that require asset acquisition and ongoing operational costs? They can use data to help make their processes agiler. How? By decreasing down time, anticipating needs and production elements better. Analyzing this and actively taking steps to improve various business elements will save money in the long run and gives employees more time to engage with customers or in research and development and not in administrative tasks. An example I received from a course on Data Visualization in the Retail Management Certificate at Ryerson University is from the University of Texas: if the "average" Fortune 1000 businesses were able to use even just 10% of their data, there would be more than a $2 billion increase in revenues. (Wowzas)

Shall I sell you more on why you need to get started on big data strategy yesterday? Ah, well thank you. Please enjoy the next session, which is all about the 101 on big data so you can sound cool in the next business meeting, or wine discussion around the next generation of global commerce.

Big data was defined in 2011, and consists of the four V's of big data:

Questions to ponder:

  • What data is important to track? (KPI's)

  • How fresh do you want your data and analytics? (collation rate: hourly, daily, weekly)

  • Where is your data coming from? (groupings, sourcing, marketing activities)
  • What is the quality of the data? (did you hear it from the local gossip, or did hear it from the donkeys month? 

Things to learn:

  • How to use analytics to create value from the data
  • How to know when to react quickly or slowly to the data
  • How to manage various types of data (structured and unstructured), more importantly how to structure and measure unstructured data so it adds value to your business.
  • What are the indicators to tell you trends across channels (social media, customers, vendors - think Porter's 5 Forces)
  • If large enterprises used their data to drive productivity, it would and result in increased sales of billions of data and productivity gains in the realm of 20 - 50%.
  • Multi-channel retailing is where the real complexity comes in (keep checking in for another blog post on the topic).

 

 

Dashboards, the trendiest thing in data

A picture tells a thousand words, just as dashboard answers a million questions. You can customize and adapt different businesses to meet organizational requirements, to provide context and simplifies millions of pieces of data. 

Dashboards originate from automobile dashboards and have similar characteristics. Data is complex and has multiple processes and data sets. Automotive dashboards allow you to get a whole sense of what's happening in your car in an instance. That's what data can do for you.

Have you ever heard that the past repeats itself? Data can help us predict, and has been doing so for recent years. A recent article in The Economist talked about Moore's Law theory about to be proven wrong because technology is moving faster than ever before and 'debunking' what has existed to be true until the present time. 

Thank you, Cloud, for giving us real time information. Now we, as people who have to make decisions, can be backed up. Data always brings value, and just as you trust your dashboard (unless it's broke in some capacity).

What do you find in a good Dashboard?  

 

  • graphs

  • Gauge, like your automobile dashboard
  • tables

  • What I like to call, the classic excel sheet, where you see data in columns and rows. Simple data has fewer rows and columns; complex data has a myriad of them. 
  • Charts (Bar, column, and line) 

  • Bar and column show comparisons, line charts reveal trends. 

The 101 to dashboards is one can either be operational and analytical, based on the type of data available, and the business questions you are trying to answer (what do you define as success), and who is viewing the dashboard? 

Thank you Ryerson University, Data Visualization Course 2015 for the following the following chart:

So, the only dashboard software you want is one that is in the cloud and you can use on other devices. 

 

Data Models

Data models, buzz words in the information era, but what does this even mean? Data models represent the data in a business and how it relates to each other. Data are grouped based on similarities and put into tables that connect by keys. In Salesforce jargon, the Schema Builder function represents a data model; records are tables and keys are the fields.

In data, there need to be unique keys that allow a system to allocates rows/attributes to a primary piece of data. How these attributes link together determines how items are connected, usually a representation of an organization's business logic. Ultimately data models allow you to create relationships amongst variables and attributes to see how elements relate and affect each other. 

Where does excel fit in this? Excel worksheets are tables and individual data that represent data that could be linked together by a database. Excel does not have the function to link data, that is where databases come in. Databases create the links of data, which gives software companies like Salesforce, to give a 360-degree view of a customer. Data architects and software developers design these links, usually, but in Excel, one has to manipulate data. 

A question to ask yourself as a business, when designing your data model:

- What is customer information necessary to optimally do business? 

- What are the steps our customers take during the pre-sale, sales processes, post sales and growth stages? What is it like for your company?

- What are the top 3 - 5 key pieces of information we need to serve our customers, execute our businesses processes and empower our employees? How do they relate to each other? 

- What are the top 3 - 5 metrics that show we are successful? 

These questions will start to facilitate how one kick starts the database processes. Once you have the data turn into information, what will you do with it? How does your decisions process change? Let me know; I'd love to learn how this worked for you. 

The Silent Seller: Visual Merchandising

VM

Visual Merchandising is the process of promoting the sale of products by producing mental images that urge potential customers to make purchases (Silent Selling, 2012). It is important that visual merchandisers can communicate the overall mission and vision of a brand that is consistent with a company's overall promotional mix and brand strategy. 

A visual merchandiser needs to create relationships with their customers with the value of a brand image in mind. Customers give feedback by purchasing a displayed product at a certain price and that they like how an organization is doing business.

In determining the characteristics of a visual merchandisers and a career in visual merchandising I have looked at a Visual Merchandising job at H&M, Triumph International, and Chanel. All of the companies are in the fashion industry but serve different markets at a different degree of scale.

Key attributes employers look for are the following: 

-       A sense of style, and creativity

-       Work with other business units including Store Managers, Marketing and Management and have the ability to build relationships within a company

-       Training sales associates, to ensure the brand, product and selling is well understood

-       Planning floor plans, budgets, and forecasting of visual merchandising with 3D rendering and drawing packages

The potential career paths related to visual merchandising would be marketing, sales and management. Having to work across functional areas of business allow for an opportunity to move vertically throughout an organization from the marketing communications team, buying teams or even sales managers. Typical salaries of a visual merchandiser are between $25K - $35K, managers, similar to junior fashion designers, Visual Merchandisers would be working with Visual Merchandising Managers, Selling Managers and Marketing Managers who make between $60K - $70K.

It is important for a visual merchandiser to have skills in trend forecasting, communications, relationship building, retail sales, adobe creative suite, AutoCAD and Microsoft Office Suite.

A career in visual merchandising is dynamic, an incredibly important in the selling aspect of products and the building a brand through the atmospheric elements within the lease lines, the boundaries where a store space begins and a mall's common area ends, of a store. Visual Merchandisers need to understand the larger picture and depict a certain image that a specific segment can relate to and feel the urge to buy presented merchandise.  Visual merchandising is different for various businesses, small independent retailers (formally known as mom-and-pop shops) may not have the same volume of new products on a regular basis that a large retailer in a strip mall may have. 

Optimizing Customer Based Initiatives

It's important to allocate resources to maximize impact and return on investment, and managing customer based initiatives optimally allows for that.

That's where the customer equity test, balancing marketing budgets between customer acquisition and customer retention efforts. Managing customers for three different outcomes: maximizing revenue in the near term, short to intermediate term and optimizing the asset value of customer relationships over the long term. Customer equity describes the effectiveness of customer strategies and implementation because it is primarily determined by the total value of the enterprise's customer relationships. 

A sole focus on short-term profit is a recipe for destruction because sales personnel are worried only about short term milestones not meeting long-term strategy. It's about increasing the profitability of current customers and the likelihood of turning prospects into customers. 

Return on Customer is a metric designed to measure the efficiency with which value is created from the available customers.  ROC needs an integrated segmentation study with multiple dimensions, a related attribution (churn) study, and a detailed LTV analysis.

Leading LTV predictors fall into four categories:

  1. Lifetime value drivers
  2. Lifestyle changes
  3. Behavioural cues
  4. Customer attitudes 

Understanding where your customer is in life and the product lifecycle, how they use your product and services and their attitudes towards technology or new process can help better manage your customers. 

Check out the below infographics on how Starbucks 

LTV of a customer_Starbucks

Now you know the details in LTV the following is information on the impact of keeping customers. 

customer retention

Remember that customers are your bread and butter in a business and without customers you have no business. Treat them right and understand where certain customers fit so you can serve them better and have a thriving business!

Differentiating Customers by Their Needs

You can't be everything to everybody, but you can be something to someone. To create value for customers a business must be able to see the customer's perspective and those perspectives will differ based on the individual. Customers want to have a problem solved, or get a job done. That job can be looking and feeling fabulous or it could be fixing the kitchen sink. 

Customer needs can impact various aspects of the business model from the product to how the customer buys the product, the way it is delivered, the communication style and channels, to invoicing. Needs and value is where the value proposition between a business and customer comes to life; what can the business to for the customer and what can the customer do for the business. A business can have end-users and customers (i.e. clothing or beer) and the firm needs to decided who to focus on to create value. 

Product benefits and attributes are not the needs of the customers, all customers have different needs, the benefits help solve those needs. Customers can have very similar demographics, but very different attitudes towards themselves, their families and society, their beliefs, values, behaviour and their lifestyles. A company needs to take a customer perspective, and only once a perspective is met can a firm influence a customers behaviour. By segmenting based on needs companies can direct marketing effectively to these groups by creating customer portfolios. 

It is important to note that there are various aspects to understanding needs, including:

  • Customer needs can be situation in nature
  • Customer needs are dynamic and can change over time as well
  • Customers have different intensities of needs and different need profiles
  • Customer needs often correlate with customer value 
  • The most fundamental human needs are psychological
  • Some needs are shaped by other customers while some needs are uniquely individual
  • There is no single best way to differentiate customers by their needs
  • Even in B2B selling, a firm's customers are not really another "company" with a clearly defined, homogeneous set of needs.

A successful company builds a learning relationship with customers and is agile enough to change the enterprise's behaviour toward the customer based on more in-depth knowledge about a specific customer. 

Are all customers worth fighting for? Some are worth more than others.

Different customers have different values to the enterprise and different customers have different needs. Your customers are an investment, so it is wise for a business to invest more in the customer that gives the greatest return and less into a customer that only takes resources and receives no return. 

Companies and specifically start-ups need to prioritize efforts, and define the value a customer is currently creating by his/her actual value as well as the potential value the customer could create for the enterprise. 

Marketers with direct connections to their consumers customers use decile analysis, ranking their customers in order of their value to the company and then dividing this top-to-bottom list of customers into 10 equal portions to understand their marketing environment. The objective is to find the top 10% of customers and serve their better. Anticipating the future value of a customer is challenging because behaviours are always changing, and a firm will never truly know as forecasts are based on assumptions. 

This is an aspect of marketing that is a science. Determining the actual value, or lifetime value (LTV) is the net present value of the expected future stream of financial contributions from the customer. This is based on the idea that every customer day will be responsible for some series of events into the future and will have a financial impact. The net present value (NPV) of value creating events (purchase, warranty, exchange, help line call, referral, etc..) can be achieved by applying a discount rate to it to factor in the time value of money as well as the likelihood of the event. Each customer has a journey (trajectory) to go through with a business (think about banking) and that journey can be anticipated and quantifiable with predictive analytics. 

The variables used in quantifying LTV is challenging as many aspects are qualitative and very hard to measure. However the following are data points LTVs should incorporate:

  • Repeat customer purchases
  • Greater profit/loss per sale from repeat customers : new customers
  • Relationship strength (customers willingness to collaborate with trust through data exchange)
  • Customers records 
  • Cost to serve/support 
  • Acquisition costs
  • Response rates to marketing/advertising efforts 
  • Company and industry specific info

A customers potential value represents the increased value that could be realized if the customer were to behave differently, presumably based on the firms behaviour. Unrealized potential value is used to describe a customer that with the right strategy will increase in value. Assigning proxy variables to assist companies in ranking customers can be useful to assist in determining LTV. In direct marketing a proxy variable called RFM - Recency, Frequency, Monetary Value - are used. The goal of this is to gain insight into future actions, and be predictive. 

Based on Relationship Marketing theory, there are five categories of customers: 

  1. Most valuable customers (MVCs)
  2. Most Growable customers (MGCs)
  3. Low maintenance customers
  4. Suer-growth customers 
  5. Below zeros (BZs)

Understanding if customers would or do refer customers is valuable too, and Fred Reichheld's Net Promotor Score (NPS) assists enterprises in doing so.  NPS is a compact metric designed to quantify the strength of a company's word-of-mouth reputation among existing customers. The NPS distinguishes customers into promotors, passive and detractor customers. The metric does not answer the question of why, but it does quantify customer dissatisfaction and is a much better predictor of defection than customer satisfaction if of loyalty. It is important to recognize the value of referrals because it is a significant component of overall lifetime value. 

Companies will have a mix of customers and managing that mix is what will bring a competitive advantage and a more profitable relationship with customers. Firms need to add the number of MVCs, create more profitability from MGCs and decrease the number of BZs. A company needs to focus on acquiring MVCs and MGCs and these customers are harder and more expensive to acquire. This  means a firm needs to invest in acquisition, development and retention accordingly. 

Some customers are worth pursing and fighting for, while others give reason to end the relationship. The key aspect of all of this is to treat each customer differently and to understand that each customer has their own needs and current and potential value for the company. By differentiating customers a firm can better serve and add value for a lifetime customer-vendor journey. By identifying and concentrating on the customers view in all aspects of a business and their future needs a learning relationship will flourish.

Identifying Customers

“The goal of identifying customers refers not so much to figuring out which customers we want (that comes later) – but to recognizing each customer as that customer each time we come in contact with him/her, and then linking those different data points to develop a full picture of each particular customer.”

Managing Customer Relationships, Peppers and Rogers

Identifying customers is not an easy task, but it is the first step in creating superior customer relationship strategies. The heart and soul of relationship marketing is treating different customers differently and to do this a business needs to know one customer from another. Companies business models and channel structure more often than not, does not allow for all companies to collect customer data. Many B2B consumer products only get customer data when they sign-up for warrantees or promotional contests.

Steps companies can take to identify customers are:

1. Take an inventory of all customer data available

2. Find customer-identifying information that is on file 

3. Get customers to identify themselves 

4. Identify the behavioural, attitudinal and demographic data 

A tactic to start collecting data is through frequency marketing where an enterprise rewards its customers with points, discounts, merchandise, or other incentives in exchange for a customer to continue to buy (i.e. loyalty marketing). Frequency marketing programs can give a firm the ability to link interactions and transactions to a customer. Businesses need to be cautious of a parity strategy, where the entire loyalty program is to simply give discounts with points and/or prizes. Loyalty will be based on price and not on emotional.

Identifying activities need to define the identify, discover a means to collect, link, integrate, recognize, store, update and analyze the data to make it securely available to various functional units within an organizations. 

Being able to analyze data through databases gives analysts the ability to identify patterns that are not possible when the information is in silos. 

Customer development for B2B enterprise has many similarities to B2C development but with some differences. Primarily, who will sign off on the sale? All parts of the deal/negotiations need to be considered. 

Ultimately what a  company wants is to establish a fluid real time collection of data, or zero latency - no lag time required - in the collection of data. A firm needs to be able to accomplish a learning relationship over the lifetime of the vendor-customer journey, and to do that a firm needs to be able to identify their customers every time there is an interaction. 


Customer Loyalty

MadMen shows the dominance of the advertising age and the power mass marketing once had on consumers. Now, as the power shifts from suppliers to buyers it is loyalty that keeps a company competitive, not just the ability to persuade.

The historic approach was for companies to use cognitive marketing, to change customers perceptions to create a shift in attitudes that allow for differentiation from substitute products. Today customers need more than just the benefits of products and services but also the stimuli to create a desire to purchase (behavioural marketing). Many companies do this through extrinsic motivators, such as loyalty programs or discounts, to achieve a desired purchasing behaviour. However, this is superficial loyalty and only relevant in the short-term. It is relationship marketing that creates deep emotional connections (emotional marketing) that keeps a customer loyal and a lifetime association with a brand. 

A sophisticated loyalty program distinguishes the great (angle) and unprofitable customers (devil). A company wants to listen to what the right customers say, while other customers should not be incentivized to remain a client. 

There are two different directions of loyalty, attitudinal and behavioural. Attitudinal is loyalty that is in a customer's state of mind and is only loyal if there is a positive attitude towards a brand.  If the focus is on attitudinal loyalty a company needs to focus on staying competitive by improving the product, image, service or other elements of the customer experience. Behavioural loyalty is focused on re-purchase activity, rather than the attitudes or preferences. Many grocery stores use behavioural loyalty and customers may repurchase even if they do not like the company or feel any degree of emotional connection, its only a functional relationship.

More often than not, companies will do give aways and then never follow up with customers once the give away is over leaving a wasted opportunity to learn and connect with customers. A good loyalty program is customizable where a customer can mix and match aspects of a promotion to fit their needs and it works with other programs (i.e. star alliance). Programs need to focus on customers not products and measure the positive impact made on behaviour that develops a stronger trusting relationship. 

I do not often sign up for loyalty programs, but I always do with airlines. When Porter first started I remember they sent me a $10 Starbucks gift card on my birthday and I was appreciative. I still fly Porter even though I think their customer service is inadequate after many terrible experiences with them, those memories pass much quicker then them sending me a present on an important day. 

Loyalty programs can be incredibly effective if it's more than just capturing a sale with a complex pricing strategy (i.e. promotions!) and it is actually about learning how to serve the customer better. Knowledge is power and information allows people and businesses to make better decisions. 

What are your favourite brands? How do the brands develop your customer loyalty? Who do you shop with that thinks you are loyal, but you are just there out of convenience (Sobeys *cough*)?

 

Managing Customer Relationships: Their Evolution

The way businesses interact with customers has evolved dramatically over the past decade, with it previous viewed as a transaction but is now seen as a a buying journey. It's about building long term and mutual value, one to one with customers. It is technology that has transformed marketing, giving new ways to connect and interact with customers. 

What used to be a one way messaging from businesses to consumers, is now moving to a two way communication based on more than just product innovation. Customers now have access to more information, with greater transparency leading to decreased customer loyalty.

Relationship marketing is an aspect of customer service and puts companies closer with customers and gives marketers the ability to better understand and influence customers. Relationship marketing is facilitated with technology, such as e-commerce, database marketing, loyalty marketing, telemarketing and channel marketing. This is done with enterprise resource planning (ERP) systems, supply chain management software systems (SCM), enterprise application integration software (EAI), data warehousing, salesforce automation (SFA), marking resource management (MRM) and other enterprise software applications.

Relationship marketing has to be adopted by top management for a company to become a customer strategy enterprise, and implemented through a series of strategies and processes to focus selling on a lifetime association with individual customers. Relationship marketing segments customers into portfolios, profitability level, a customized service that builds a chain of relationship to inspire value sharing (and making a company more competitive). 

Relationship marketing is more than just exceptional customer service along, it is documented and characterizes customers into unique groups that can be influenced and profitability catered to. Businesses that use one-to-one marketing can experience a decrease in costs, higher margins and longer lifetime value of customers. People want to be treated for the individuals that they are. Ultimately, one wants to move customers through the get -keep -  grow funnel. 

Relationship marketing can make a marketer totally rethink and re-strategize customer development, moving from an average customer view to an individual one. Not just segments of the market, and that all customers are the same. Relationship marketing identifies customers differently, with different needs, behaviours and spending. This is important because it is better customer relationships that creates loyalty and keeps a company competitive. The 4 p's of marketing was the core of the disciple, but it has evolved to be the 'get' part of the strategy. It is thought that there are 4 c's of customer service, customer value, lower costs, better convenience and better communication.

Businesses need to continuously learn about their customers, and that takes coordinated effort. It is expensive to acquire customers, just getting one customers business online costs up to 95$ per person and as low as $11 for catalog based retailers. It is strategic to allocated a significant amount of resources to retain customers and increase the value and satisfaction levels customers face. Companies need to address this in how they manage their sales representatives. If a sales rep doesn't get rewarded to keeping a customer happy, and only for acquiring new customers, there is little incentive for customer service to be geared towards the existing consumer. 

Being a customer centric company means that all levels of the organization need to take part in relationship marketing. There are five principle business functions that need to be integrated to a customer strategy:

- Financial custodianship of the customer-base: customers are a primary asset (even if accounting principles do not agree!)

- Production, logistics and service deliver:  a company needs to incorporate customer interaction and behave as one would in a mutual relationship. 

- Marketing communications, customer service, and interaction: connect all the communication channels in customer communication. This is important! I received two calls from the Economist offering me a promotion on a new subscription, but I still have a subscription just online and not print. Major fail Economist, major fail! 

- Sales distribution and challenge management: challenging, but important, a business needs to be able to customize products and sell at individualized prices. 

- Organizational management strategy: businesses need people who are responsible for customers and customer relationships, not just products and programs. 

A customer-centric business strives to build continuous relationships with customers, for a long time. Products and services are customized and every time a customer interacts with a company it should bring value and increase the satisfaction a customer feels. Loyalty is a two way street, and company need to be loyal and be considerate to their customers. 
 



MOOCS and Online Courses: A Lifelong Learner Perspective

There has been a significant amount of chatter about the value of online learning, their effectiveness and the future of the classroom. I have put together different MOOCS (on Intellectual Property for The Ontario Consortium of Graduate Studies), taken a number of Coursera courses, a Udacity class and I am doing an online certificate in Retail Management with Ryerson. Although only a few classes are certified university credits (Ryerson) I learn something from every class I take. No wonder online learning is one of the fastest growing educational industries, people want access to education. 

Online open courses like Coursera and Udacity are changing their business models to become major revenue generators. Coursera has verified certificates, which range from $30 - $79 per class. I officially went through the "Managing Fashion and Luxury Companies" by Bocconi University and was very impressed by the level of content provided and the engagement in the class. I am also doing "Digital Marketing" unofficially and they do not offer any kind of certificates/recognition without paying, and the course is $79USD, too high for me. For me, student participation is impressive, people want to learn, connect and receive recognition. I have never experienced students so engaged, definitely not even comparable to my Ryerson class filled with professionals and students, or on any other online learning platforms like Lynda.com. I understand the skills are important, and getting credit is very important as well, but employers care about the practical applications more than 'start-up' universities. Is it really worth ~ $500USD to get a Coursera certificate? I'm not sure yet. 

Udacity has a number of free classes, but offers a $200 monthly subscription model for people interested in 'nanodegrees'. Many of the classes are created by Facebook, Twitter and Google. These are pricy 'nanodegrees' ranging from $200 - $2000USD. Again, skill based. I am personally incredibly interested in learning more about data science, statistics and programming. I can learn for free in some of the classes and there are many options in learning these skills. I am not sold that recognized credits from Udacity, or Coursera are worth hundreds of dollars. I think the skills will speak for themselves. 

Why am I paying thousands for a Certificate in Retail Management from Ryerson though? Many of my friends have done certificates there, and it is a reputable university with a well known continuing studies department, The Chang School. I believe this will give me the specialization I need to make my retail company, ULLO, even better. It is specific knowledge that is not offered anywhere else and Ryerson is one, if not the only, Retail Management school in Canada. I have also gone through interesting learning experiences, aside from textbooks and online discussion questions. Having to do a group project and never meeting anyone was a trip and enjoyable! However, for those visual and audio-visual learners, these are not the classes for you. No video lectures, just pure text book reading. I can tell you my new Relationship Marketing textbook does not look like a 'hoot' to read. 

 

Sincerely,

 

@TaraLScanlan 

 

Visual Merchandising Window Displays: Dublin, Ireland

Dublin is am amazing city, with great people and even better beer. The retail environment is not as competitive as other large cities, but it offered up a good variety. Pennies (Primark in the UK) was a fast fashion hot mess, with a little bit of everything for men and women for cheap prices (between 2 - 20 euros). River Island has a presence, but TopShop took the cake with window displays. 

River Island, Dublin

IMG_4430.JPG

Zara, Dublin

Hickeys, a fabric store 

TopShop, Dublin

CSS, Styling your website and hanging out with Ladies Learning to Code

Chantel, an alumni from UW's Psychology program, works at Desire to Learn and learned how to code when she was 12, playing a farm animal game. She taught at the Ladies Learning to Code, and asked me,

"What brought you to this workshop?"

"Engineering envoy." I peeped back. 

I spent my Saturday learning the basics of HyperText Markup Language (HTML), and Cascading Style Sheets (CSS). HTML is the content behind a website, and CSS is the styling of a site. 

When thinking about code you need to pay very close attention to detail. Miss a {, ; , : or even a "") your syntax does not have the proper elements to give a command. 

p {

is f*ck*d.

}

Programming is similar to learning another language, like learning French, Hindi or Arabic. A learner needs to learn what variables go together to make letters and words have meeting, with the verb tense being the independent variable. The major difference is that you communicate with your code in how it responds to commands, visual or through processes, and in language you orally communicate with people. 

Learning an oral language has a relation to math, with the way words string together to make sense of something. A sentence can have a variety of syntaxes based on the language. In English it is Subject + Verb + Adjective + Noun. The way the words interact follow rules, albeit some have its exceptions, but with logic behind it. 

If you can learn a language can you easily learn to code? Here's my test, after today I feel like I am on to a new hobby: Learning CSS + HTML, and if I'm really savvy Java. 

Ladies Learning to Code was a full on and great for beginners and those with experience in CSS and HTML. It was a fast passed and informative class, and I can tell you worth the 60$. I will be going back to the next Ladies Learning to Code event. 


To blog or not to blog? That is the question.

Want to engage customers online and not sure how? Want to build a brand or direct more users to your websites? Blogging is one of the best tools to do so. 

 

Blogs push information out to create content for a larger target market, and a platform where businesses can reach and engage customers.

 

Blogs help communicate different messages and allow individuals and businesses push content. The key to great blogging is offering valuable information and can become a trusted place for information.

 

Morten Rand-Hendriksen talks about the 5 main stages for blogging:

·      Goals

o   Setting goals that are linked to a business as a whole, and all marketing is hitting the same messages

·      Strategy

o   How is the success of the blog measured against the business?

·      Technology

o   What technology do you use?

·      Content

o   What content should you create and how should it be published?

·      Implementation

o   The blog takes place here, and helps businesses plan about content, publishing and engaging

 

Goals:

·      Business Purpose: develop a blog to highlight my skills & knowledge on management, strategy and marketing to get hired by Facebook.

·      Blog Goals:

o   What can a blog visitor learn from us? 

o   How can the blog be used to help us get closer to our business purpose?

o   Short –term: Become the go-to source around marketing & strategy

o   Long-term: Get hired more and make more money

 

In the plan, you should have a 1-year critical path (things that will lead you to make forecasted revenue) with incremental milestones over the year, while keeping in mind the external environment and how the blog develops your own business development.

 

Are you delivering what your customers want?  Like any business, it’s a big deal, to create and engage an audience. You need to check your analytics. What are the top blogs? Are they what you thought? You need to check in with your content and if things are meeting your milestones and original objectives. Continuously asking yourself if you could do better and re-evaluate your strategy, is it solving it’s purpose?

What is your online assets? Do you have a LinkedIn account? Facebook?  Twitter? Youtube? What does your blog have? What segment of the market does your blog fall into? Does your audience engage? Do they create a conversation with you on Twitter and Facebook? 

Be consistent, and have fun with it! 

Light & Love,

 

@Tara_Lorraine

Forecasting 101

Forecasting is not a walk in the park and it is something that many of my students frequently ask me about, with a look of confusion. When developing forecasts, reflect on the purpose and objective of the forecast. Is it to impress venture capitalists? Is it to manage the next season of inventory for a retail location? Or is it to make a decision about hiring on a consulting firm? Forecasting is important for all types of organizations, and in this post you will get the basics of what you need to know. 

Forecasting is predicting what consumers and clients may do under a given set of conditions. To be able to do this accurately, a business analyst needs to have the right information and understand how to infer meaning and recommendations at times from unconventional data. Forecasts are educated estimates and by all means are not always, or even  often, 100 percent correct. 

Some questions to ask yourself, and helpful information to have:

  • Past sales 
  • Internal growth or contraction
  • Number of sales associates/managers/executives
  • Competition (entering, exiting, increasing or decreasing promotions)
  • Economic Conditions ( happy financial times, or are we screaming back into recession? How will this influence sales at your store?)
  • Target Customer (likely behaviour, situation, needs)
  • Future trends (learn more about trends in Understanding Trends and What Your Customers Want blog post) 
  • Holidays coming up
  • Population Shifts
  • Corporate wide changes/trends/promotions 

Once you have gathered information it is time to do a short-term forecast, which is usually 1 year, then you can do long-term forecast that can be visualized between 3-5 years. 

Actual sales need to be monitored to determine the accuracy of the sales forecasts, and the more agile a company is the better able to adjust organizational behaviour and product mixes for consumer needs. 

Below are some key vocabulary for forecasting sales:

  • Stock-to-Sales ratio includes maintaining inventory at a specific percentage to sales. 
    • =  value of stock/actual sales 
    • Indicates the relationship between planned sales and the amount of inventory required to support those sales and is used to calculate planned BOM Stock levels. 
  • BOM Stock Levels - the amount of stock required to begin the month. By multiplying the stock-to-sales rtio for the month by the planned sales for that month, you can determine the inventory level needed at the beginning of the month (BOM)
    • Planned BOM inventory = stock - to - sales ratio X planned sales 

The most important thing to think about is your PL Statement (Profit & Loss Statement). What is your revenue (total sales), and subtract the cost of goods sold ( for products the cost merchandise costs, for ULLO we determine COGS at the FOB price for products; services would be human capital) to get gross profit. Calculate the operating expenses, how much does it cost to print business cards, rent space and acquire customers? Categorize the expenses that have a one time fee (many of these are fixed expenses, such as furniture, licenses, and software. What country/province/region are you operating in? What is their tax (or in many places VAT)? Apply it. Subtract Operation Expenses,  non-recurring expenses and taxes from gross profit, and voila, net revenue (aka profit!). 

 

Sales - COGS = Gross Profit - Expenses (Operating + Non-recurring) - tax % (applied to sales) = Net Revenue (Profit)

This is where business gets fun! 

I used to loath accounting, forecasting and the technology aspect of business. Now, I cannot get enough of it! It allows you to make better decision and solve problems. It is intimidating at first, but it is logical and makes sense once you have to do it to make your business survive. 

 

Luck & Light,

 

@Tara_Lorraine

International Market Visits

London, Paris, New Delhi, Tokyo and Buenos Aires are just a few cities independent retailers may want to visit to source their assortment plans. Many store owners ask themselves how to do this? If you want to source products internationally, this is the blog to read.

First off, what types of products are you trying to source? High-end luxury products? Perhaps with the Italian brand? Cheaper, but ethnic products? Furniture or jewellery? This will help narrow down where you need to look to. In this blog, we will focus on fashion products, like garments and accessories.  

There are a variety of markets a buyer can start at, including central markets, merchandise marts and trade shows. Central markets are where there are multiple venders, like the Garment District in NYC, the hub of fashion in the US. Merchandise marts are where multiple vendors are in one stop, and buyers can see a variety of products at different prices in one spot, marts allow for more frequent trips.  Tradeshows highlight the newest products and can create a significant buzz around new products, CES is an example for technology products. Tradeshows give buyers insight into new trends, can browse pricing and products and place orders. 

How often do you do market visits? The answer is, it depends. For fashion products, buyers need to go more frequently because trends are always changing. Cosmetics and furniture buyers can manage on going once or twice a year. 

Before going on a market trip a merchandising buying plan needs to be completed with a vendor analysis (i.e. how much money do you have and for what and who are you looking to buy from?). Make sure you get approval and feedback on your assortment plan ideas, to get more support from sales associates and staff. If possible, schedule buying visits with vendors, associations and see if there are any tradeshows happening. Determine how many days it will make, and make sure your store is equipped to survive without you. 

Virtual marketplaces continue to pop-up like Modalyst and Joia Accessories that make it easier for retailers to buy products at wholesale and see them without leaving home. This really is the future of retailing. 

So where do you want to go? Shopping in Nepal? Check out Thamel for conventional products and Patan for Fair Trade products.