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3 ways to grow your business with POS data analysis
Dec 18, 2024 | 5 minute read
Accessing point-of-sale (POS) data is the first step in understanding your customers and improving your offerings. Learn how POS data insights can drive your success.
Customer data is more than just graphs and figures – it is a gold mine of insights that small businesses can tap into to stay ahead of competitors. Further, your customers now expect personalized experiences and offers from all companies – even small businesses. According to a recent Salesforce survey, 66% of customers expect companies to understand their unique needs and expectations.
So, how do you get started? Although focus groups and surveys can still help you uncover customer needs and wants, you’ll find more actionable and precise insights through POS data analysis. For example, sales data during popular shopping seasons could help your business:
- Generate new ideas for products and services
- Predict consumer behaviors
- Enhance inventory management
- Improve customer service and personalization
- Keep track of finances
- Fine-tune your brand
Your POS system is likely an untapped source of valuable data, ready for you to dive in. From customer activity records to top-selling products, leveraging POS reports allows you to make informed decisions to improve your offerings, streamline operations and ensure customer satisfaction. Consider these three approaches:
1. Personalize your offers and promotions to individual customers
Getting granular insights from POS data can help you serve your customers before they even make a purchase. Customer and trend data can help you create personalized marketing campaigns and send relevant messages to the right customers at the right time. You can create customer personas and target audiences for email campaigns, special offers and more by tracking number of visits, average spend per transaction, days since last visit and purchase quantities.
With this data, you can quickly launch a new marketing campaign or personalized shopping experience any time, based on questions like these:
- When was the last time the customer made a purchase?
- How often do customers need reminders to make additional purchases or restock their personal supply of a product?
- What new products would customers like based on previous purchases?
2. Adapt your products and bundles based on customer behavior
When you dig into historical purchasing data, you’ll likely notice data points and trends that can help improve your products and distribution strategies. Keep track of products that are commonly bought together, whether purchased in-store or online, those that are frequently returned and much more. Based on this implicit feedback, you can adjust offerings – even in small ways like packaging or promotional materials – to drive sales and grow your business.
Bonus: Use this POS data to create personalized product bundles that fit your customers’ preferences for common purchases – hats and mittens, shampoo and conditioner, headphones and chargers and more.
3. Optimize inventory tracking to seasonal fluctuations and customer preferences
Managing inventory is hard – especially if you sell perishable or fragile products. This challenge is amplified by seasonal fluctuations in customer demand for certain products – not many people are buying wool sweaters in the summer or popsicles in the winter. Sales reporting from your POS system can help you compare year-over-year inventory movement to make more accurate predictions, rather than relying solely on monthly data that may not reflect upcoming shifts in seasonal customer behavior. Further, metrics like inventory-to-sales conversion rates can help you plan ahead for popular shopping seasons, allowing you to stock up while supplies/packaging are cheaper.
Your POS system is much more than a cash register – it’s an untapped source of valuable data about your operations, products and customers that can be turned into actionable steps to grow your business. From insights into customer behavior to precise inventory tracking, POS data analysis can unlock your business success.
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