What’s your data strategy?

Customer profiling and clean product files will help you get closer to customers, says MIKE MCGEE

Most definitions related to the subject of data strategy and its benefits will concentrate on phrases such as ‘harnessing an organisation’s information to produce a common language that enables the management team to deliver better customer results, effective cost control and higher returns’. And who could argue against those being good things? Ultimately, good data allows business decisions to be made based on all the facts, rather than opinions or this month’s new idea.

Sales data is, of course, a vital component of any information system and wholesalers are in a great position because the customer registration process enables operators to identify all their customers – more or less.

In comparison, despite the best efforts of multiple retailers and their loyalty schemes, there are swathes of unidentified people who come through their doors to buy products and then disappear in a marketing sense when they go through the exit.

Knowing what your customers buy, how often, where they work or live, and their business profile is like all Christmases coming together for most industries. Yet generally wholesale rather takes this for granted and has historically failed to leverage this vital information to the full.

There are several reasons for this:

Wholesalers large and small do not have the resources to interrogate the information available – it is, after all, a low-cost industry – so there is a heavy reliance on personal experience rather than evidence-based decision-making.

The temptation, as with nearly every other sales and marketing initiative, is to structure activity in a way that is attractive to suppliers to increase their investment rather than to use it as an internal business development tool.

The concept of data-led sales and marketing is seen as nebulous compared to the very real need to get a trade day organised, get cover for staff off ill or indeed any one of the hundreds of operational issues that can occur.

There is, as always, a broad spectrum of adoption of any technology in such a diverse industry but it would be fair to say that there are very few examples of data-centric wholesalers. That is not to say that information isn’t used for some aspects of the organisation, but it does not drive it in totality, with sales and marketing information used to inform and set the business culture for stockholding, supplier delivery schedules, supplier business planning, staff-resource planning, asset utilisation and the crucial area of customer personalisation.

Customer profiling Predict what new products will succeed

Technology brings the opportunity to get even closer to customers but requires the data tools to do so.

Key to this is customer profiling with individualised communication. By profiling customers’ propensity to be deal-oriented, their need for advice, their purchases versus an ideal core range and purchasing across categories (or not), you can implement a whole contact programme for each of those customers. This would encompass sales contact, vouchers, texts, app availability, emails and so on. It would also identify their importance and potential to the organisation.

There is a huge number of potential extensions to this. New products could be profiled to determine both their likelihood of success, based on customer propensity to buy by depot and region, and the levers needed in supplier support to give them their best chance.

There is a strong case for a new technology champion in every wholesaler no matter what the size of the company and/ or linking with local colleges and universities to do some forward-thinking on how we are going to relate to our customers and suppliers in the future. Remember, even three years is a long time in this area – just look at the growth of apps.

Clean product files The key to new possibilities

Although it sounds basic, the first prerequisite of any data strategy is to have a clean product file with no duplicates, full descriptions and a sensible product hierarchy. Without this basic step, everything else will be worthless, and that includes internal reporting and measurement as well as ecommerce.

Our colleagues in the data provision sector will give innumerable examples of operators having nine different variations of Heinz as a supplier! It is dull, I know, but an accurate and up-to-date, well-structured product file makes an awful lot of things possible – and the reverse makes just as many impossible.

Once the product file is clean, the customer records need to be accurate and as many attributes gathered as possible, including all the various contact ­mechanisms.

Data can do wonderful things for a business now – but its potential for the future is just astounding. A data strategy might sound boring but what it can lead to could just be the most exciting thing to happen in wholesale for a long time.

Mike McGee is the managing director of The Whole Sale Company, which works with wholesalers to improve marketing, grow sales and promote customer loyalty. Mike was managing director of Landmark Wholesale for several years and then went on to be a founding partner in STL Solutions, a company that provides point-of-sale systems to wholesalers.


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