From the blog The 7 Essentials of Retail Management for Improved ROI
Small businesses are like race cars—little improvements win races. Even tiny increases in profit margin affect a business’s success.
In retail management, improving returns on investment can exponentially boost profit margin. But where should retailers focus to grab the golden ROI trophy?
We’ve figured out 7 areas where retailers can stretch their money. And you can start on any of our strategies in the next five minutes.
Speed ahead of the 50% of SMBs who won’t see their fifth anniversary.
1. Monitor quality control
Business owners know their products inside-out. QC uses their in-depth knowledge to maximize inventory value.
Schedule regular product quality tests. Don’t just look at the sales floor. Examine every step of the process.
Do other suppliers provide affordably higher quality? Does quality decrease during shipping? What’s your inventory loss on the sales floor? Ask these questions regularly, making small changes one at a time to avoid disrupting day-to-day business.
Customer reviews are a good starting point if you feel a little overwhelmed. It’s not a bad idea to regularly think like a customer.
2. Understand your customers
Of course, you need to do more than “think” like a customer. Consider developing a full client/customer persona. These detailed consumer profiles include:
- Basic demographics like age, gender, family status and geographic location
- Careers and incomes
- Vehicles they own or public transport they take
- Their favorite stores and shopping methods
- Hobbies and preferred entertainment
- Their technological literacy
- Which social media they use
Google Analytics, customer surveys and educated guesses all provide useful info. But be careful with educated guesses.
For instance, don’t assume your customers love Facebook because it’s the most popular social media site in the world. There’s more to consider when choosing online marketing strategies.
With a solid customer persona, businesses can hone-in their marketing. Precise ads mean a lower marketing budget will generate better results.
3. Know your competition
Chances are, you’re not the only business with your target audience. Learn about your competitors to protect your place in the race.
Physical storefronts aren’t the only thing to study. Every retailer should consider their online competition whether they have a website or not.
Thinking like a customer comes in handy here, too. Why would your business draw customers? What might push them away?
Customer surveys and reviews on Google Business provide concrete feedback.
Once you know where your competitors stand, use their info in your marketing strategy. Consider categories like quality, reliability, unique benefits or stellar customer service. Don’t be afraid to toot your own horn, and loudly.
4. Offer superior customer service
Millennials love boutique experiences. Customer service is a sure-fire way to provide seemingly specialized shopping experiences.
Even if your business isn’t a boutique, you should practice boutique-quality customer service.
Across the board, customer service makes a difference. 84% of businesses focused on service increased revenue. 96% of customers feel customer service influences their spending.
Don’t wait for customers to ask for help. The keyword here is proactivity.
There’s plenty of proactive service techniques:
- Product or service warranties
- Loyalty and PR programs (like sneak peeks at new products, VIP holiday and birthday gifts and more)
- Personalized follow-up after purchase
- Contests, giveaways and customer appreciation posts on social media
Don’t just rewrite the handbook and call it good. Follow through with staffing practices.
5. Hire and keep the best employees
Whether they’re permanent or seasonal, employees represent their businesses. Go the extra mile during hiring to reduce turnover.
Don’t just pick good business reps. Pick likable, honest folks.
More often than not, diverse staffing practices solve lots of problems. Diversity isn’t just an ethical necessity. It’s a brilliant marketing strategy.
Other ways to find and keep great people include:
- Offering free training, help with college coursework or starting a mentoring program
- Sufficiently staffing during heavy sales periods
- Avoiding micromanagement styles
- Offering better benefits packages and more-than-competitive pay
The time spent on staffing practices goes miles. You reduce turnover and wind up with happier employees.
6. Refine the sales process
Great staff is… well, great! But stellar employees can’t compensate for weak sales processes. If a business is difficult to work with, why would customers come back?
Evaluate the buying cycle from start to finish. Keep the customer persona in mind. Then answer the following questions.
- What steps do customers follow to find you and spend money?
- What takes customers from one step to the next?
- Do customers voice objections? When? How do you respond?
- Is the process fun or easy to repeat?
7. Plan for the future
Every business should be thinking about the future anyway, but it’s essential when improving ROI.
In this step, think outside the box. How would your business downsize? Could it exponentially upsize if able? What’s the backup if your most popular product fails? If you could develop a patent, what would it look like?
Playing around with developments and backup plans now can save pain down the road and show you new possibilities.
Prepare to go in any direction so you can make the present as profitable as possible.
Retailers stand to improve their ROI if they focus on 7 key areas.
- Monitor and improve quality control
- Understand consumers with info-driven personas
- Know your competitors and capitalize on your advantages
- Serve customers like they’re in a boutique
- Practice fair, diverse staffing to reduce turnover
- Refine the sales process, so customers come back for less
- Look ahead and reasonably prepare for the future
Start brainstorming retail ROI improvements with your today.