Spotting Customer Trends

By Christina Suter on Feb 11, 2017 at 10:20 AM in Business Issues
Spotting Customer Trends

How can you tell what's going on with your products and customer base?

I have a client who runs a bottle company and the best way for them to determine what's selling is to do inventory. The inventory tells them how much of their stock is missing and their income statement and sales will not only show them what's being sold but what's unaccounted for and that are maybe being broken or being stolen. People steal usually because they believe they really need an item and/or they think they can get away with stealing it. You solve this by tracking your inventory so that people can't get away with stealing and it going without you noticing. Obviously, you take inventory whenever it's time for you to place a new order so you know what needs to be replenished but you need to take inventory often to deal with shrinkage. 

In the case of my client who sells bottle they can find out what their best selling bottles were in the previous year by keeping tabs on her ordering and inventory. They now know that their large and small bottles are more popular than the medium bottles and can adjust her ordering and project her sales accordingly.

Inventory is a great way to note shifts in product sales. Say your product isn't a bottle but it's something like service hours. Look back in your hours from 6 months ago or the previous year and see how many hours were spent on service hours. If you offer multiple services you can break down how many billable hours were spent on each specific part of your business. Notice the trend or shift in hours and you can speculate as to why, either internally (advertising or referrals) or externally (the market is shifting) and then cross check that the trend is in alignment with your business and is in the direction you want your business to go. 

Tracking your inventory and hours will also show you who your best customers are. As a consultant I log who my biggest client is every 3 months because I work with people on cycles. Sometimes I have inactive clients and client with whom I no longer engage. This helps me know where to focus my time and where to foster the focus of my clients. You want to action the top 10% of your focus and energy to the clients who are paying your bills and this allows you to get back to them quickly and dedicate time to helping them solve problems. Twice a week I look at my list and make sure everyone got attention from me. After the to 10% I look at everyone else and make sure I reach out to them to offer help and to reactivate them as clients. 

How are most of your sales made?

Whether your sales came in-store, online, or wholesale accounts, who is buying the most and how? This will help you see the less profitable sales channel and either pull back on the ones that aren't as successful and maybe shut some of them down. Say for example a clothing store like Abercrombie and Fitch, a trendy and specific retail storefront. If they found out they were making more sales (i.e. money) online than in store, they may start looking to reduce in-store man hours, renting a smaller retail space, and focusing more on their online sales. They may even do like BestBuy and begin closing some of their storefronts and keeping enough open to service those who are used to walking in and making a purchase.

Not only will taking inventory show you where your sales are coming from but it will help you further develop your marketing to support where you're currently succeeding. Pull expenses from your storefront and purchase more ad space on websites and apps that your target demographic uses.