Categories
Small Business Tips

Guide to Small Business Inventory Management

small business inventory management

 

When you run a small business, there are many important factors that you need to consider on a daily basis. Employee scheduling, the cleanliness of your store, sales, expenses and so much more.

Managing inventory needs to be one of your priorities. If you don’t have enough product on your shelves or in your storage room for a popular item, you can lose customers. A German study showed 63 percent of potential customers who were unable to find what they wanted in one store didn’t bother to order it in that store for later delivery, but would instead buy the product from another store or not buy it all.

On the other hand, if you have too much product on your shelves or in your warehouse that isn’t selling it can also cost you money. Inventory management is a delicate balance for the small business owner.

Fortunately, today there are many good inventory management software tools available for the small business owner which, when combined with a good point-of-sale (POS) system, can help make the difference between success and failure.

Regardless of whether or not you use inventory management software, there are some best practices that you should follow in either situation. These tips will help to ensure that you have a solid understanding of your company’s inventory management.

  1. Think About Using FIFO

FIFO stands for “first in, first out.” In FIFO, the oldest cost of an item will be the one that is removed from your inventory when one of those items is purchased. Think of it like this — if you run a meat or fish market, the meat or fish you want to sell first are the ones that you brought into your store on Monday, not on Tuesday. Or if you carry a line of specialty jams in your deli, sell the ones that you stocked in May and not the ones that you added in June. You’re selling your goods in the order that you created or purchased them.

 

FIFO approach

 

This is especially important if you deal in perishable items, but it also works for nonperishable goods. If you leave an item sitting around for too long, it can be damaged or become unsellable.

Whether you’re using FIFO in your store or in your warehouse, you’ll want to put new items in the back and have the older products in the front. FIFO helps insure that you don’t have old inventory lying around for too long.

  1. Try the ABC Method

Every business has bestselling items. Businesses need to have tight inventory control over these items, and one way they do that is by using the ABC system, also known as Control by Importance and Exception. This method categorizes all of your inventory based on which items sell best.

  • A: These are your bestsellers. They typically account for only 10 to 20 percent of your inventory but bring in 70 to 80 percent of your annual sales.
  • B: These items make up 30 percent of your inventory and 15 to 25 percent of your annual sales.
  • C: Half of your inventory is likely made up of category C items, but they only account for five percent of your annual sales.

Products classified as A are the best-selling items and they make up the smallest percentage of your inventory. However, you need to keep track of these items closely because they are your biggest sellers. The C category contains the items that don’t sell as well, so you can use a simpler inventory management method here.

The idea behind ABC is that you aim to maintain the tightest inventory controls over your top-selling items in Category A. It’s essential that you always have these products in stock.

  1. Audit Your Stock Regularly

Even if you have the best inventory management software in the world, you still need to do an actual count of your inventory to ensure that you have the stock on hand that you think you do.

You can choose from any one of several ways to audit stock. Some experts suggest doing it monthly or at the very least quarterly. Remember inventory can be stolen, damaged or accidentally thrown away. Checking your inventory through regular audits is an important step in maintaining accurate inventory counts. Depending upon the size of your business, you might also want to do a large annual audit to make sure that you count everything in your store and in your warehouse.

Another idea is to do regular daily audits or more frequent spot checks on high-value items. High-value items can attract the attention of shoplifters or light-fingered employees. This kind of inventory “shrinkage” costs retailers a lot of money. According to the National Retail Security Survey in 2015, shoplifting accounted for 38 percent of shrinkage with employee theft a close second at 34.5 percent.

  1. Conduct Quality Control Checks

If you own a bike shop, for instance, you want to ensure that the products you sell are in good working order and not damaged. It is recommended that you have your employees conduct at least one quality control check per quarter.

 

quality control checks

 

In this case, your employees are counting stock levels, but with a particular focus on testing that your products are in good working order. As they are taking inventory of the stock, it gives them a chance to check for damage that may have occurred during shipping or storing, and to make sure each item is properly labeled and has a correct SKU number.

  1. Hire a Stock Controller

Making sure you have the right amount of stock in your inventory is so critical to your business that it’s probably a good idea to have one person who handles all purchase orders, receives product deliveries and is constantly checking to ensure that you are getting exactly what your ordered.

Having a stock controller greatly reduces the likelihood of overstocking inventory. A stock controller can also make sure that you’re purchasing more items that sell, and less items that don’t. This is true whether you’re dealing with raw materials or with finished merchandise.

  1. Consider Drop Shipping

Drop shipping offers three tangible benefits — (1) you can try a new product line without committing to it, (2) you don’t have to worry about inventory controls, and (3) you don’t have to pay shipping costs.

With drop shipping, you act as an intermediary. You may own a well-known store or business and the manufacturer of a particular good is interested in having you sell some of their merchandise. The customer orders the good at your store or via your online site, then the order goes to the manufacturer who ships it to the customer directly.

Although the costs involved in drop shipping are relatively high — after all, most of the profit goes to the manufacturer — it is still possible to make a profit because you are not investing any capital in storage space or shipping.

  1. Never Make Inventory Decisions on “Gut Feelings”

Almost all decisions based on “gut feelings” are bad ones. Rarely does a “gut feeling” turn out right, and even then, it’s probably more of a coincidence than anything else. Following a gut feeling is only asking for trouble.

 

inventory decisions

 

When you are deciding what items you should stock, use your inventory management software to help you make those decisions. Good inventory management software will tell you a lot about which items are selling the most, how products are doing seasonally, and when it’s the right time to order more inventory.

Inventory management software is vital to accurately forecasting potential sales. Along with the data gleaned from your software, you want to pay attention to information such as market trends, the health of the economy, tariffs that may impact your business, and the relative success of marketing approaches worked.

  1. Let Go of Spreadsheets

Spreadsheets were a great idea, but in the 21st century, when so much good inventory management software is available, spreadsheets are like typewriters — fun to show the kids but not as efficient as computers!

The main reason that spreadsheets are not an effective inventory management option is that you need to update them manually. And that means taking time away from managing other parts of your business. Even if you have a stock controller looking after all your inventory management needs, the daily requirements of managing spreadsheets can be onerous.

Spreadsheets also don’t scale with your company. They don’t give you the immediate feedback on when you need to restock or connect with a good POS system. Business moves too fast for spreadsheets to be effective any longer.

  1. Get Good Inventory Management Software

Business moves very fast in the 21st century. The right inventory management software can help keep you on the cutting edge. Here are some of the advantages of good software:

  • Inventory management software allows you to keep an eye on your inventory in real time.
  • It allows you to forecast demand for an item more effectively.
  • Inventory management software helps you keep more top-selling products in stock, and less inventory of the products that don’t sell as well.
  • It lets you see when items have stopped selling during the past year, which makes it easier to remove them from inventory.
  • Inventory management services often come with a web portal or mobile app that allow you to see your inventory levels in real time on any device, no matter where you are the world.

Best of all, your inventory management system can be directly accessed from your Point of Sale system. In fact, most POS systems offered today must include the option of connecting to inventory management software. This is based on demand from retailers who know the value of integrated POS and inventory management systems. When a sale is made and recorded on the POS system, it also immediately goes into the inventory management system so you know in real-time how much inventory you have in stock.

National Retail Solutions (NRS) Offers a POS System With Inventory Management Software

 

inventory management software

 

When you’re looking for an industry leader who can give you a state-of-the-art POS system integrated with important data and analytical tools to help you run your business – including a great inventory management system – look no further than our Ultimate Point-of-Sale Bundle.

The Bundle gives you everything you need to give your customers a modern and quick checkout experience, and to ensure your business is operating at peak efficiency. Our inventory sales management tool allows you to manage your stock levels and receive alerts when items begin to run low.

Along with these essential point-of-sale features, our software also includes important business features like store analytics, employee management, pricebook management, and loyalty software.

If you are interested in learning more about our Ultimate Point-of-Sale System, you can call us at 1-833-289-2767 or contact us online.

Categories
Small Business Tips

How to Prevent Employee Theft in Retail

prevent employee theft in retail

In the United States, employee theft costs businesses $50 billion every year. While big stores can cover the lost profit, many small businesses don’t have the money. You can’t afford to have your staff members steal from you. However, some security upgrades might not work with your budget. Use these seven strategies to prevent theft by your employees.

1. Keep Morale High

Research shows that higher wages create fewer thefts. Employees who feel they get fair pay have less motivation to steal. When they have the respect they want, they don’t steal from their company to get back at them. If you have enough money, you can raise wages to increase employee happiness. Employers who don’t have the budget to raise wages could offer more benefits instead.

2. Complete Random Reports

Check your cash and merchandise at random times throughout the day. Make sure the numbers you see make sense. Don’t check your items and money on a set schedule. Thieves will predict a set schedule and hide their evidence. Random checks discourage stealing because employees can’t guess when you’ll do them.

random security checks

3. Create an Anonymous Reporting System

Plenty of staff members notice when their coworkers steal something. However, many of them don’t say anything about it. In some cases, they worry that the thief will know they told the manager and get back at them. Other times, they don’t have the time to fill out a long report. Give your staff members an easy way to report theft that doesn’t reveal their identity.

4. Prevent Time Theft

Time theft happens when an employee gets paid for hours they don’t work. They enter the wrong working time or do recreational activities during their shifts. Keep an accurate time clock and look at work reports to see what they do at work.

5. Install Security Cameras

Place security cameras around your store and record the video. Review the recordings on a regular basis to check for theft. Try to put the cameras in places where you clearly see when theft happens. Place them near your cash register, in your backroom and other areas with valuable items. Let your employees know the security camera watches them to discourage them from stealing.

security cameras

6. Track Your Inventory

Keeping accurate track your inventory will help you catch employees that may be stealing products from your shelves. An inventory management system on your Point of Sale system is the best way to maintain inventory accuracy across all of your items.

7. Invest in a Secure POS System

A point of sale (POS) system like National Retail Solutions’ POS+ records your sales and inventory using secure technology. The POS+ automatically creates daily sales reports and monitors your cashiers. You can give each of your employees their own account. The system then lets you see the sales that occur during each employee’s shift. The POS+ saves you the time and frustration that come with having to investigate daily receipts and records. Make your small business more secure by buying POS+ now or getting a quote for multiple services.

Categories
Small Business Tips

7 Ways to Modernize Your Retail Store

modernize retail store

Updating your retail store’s appearance and technology will make you look more professional. Even businesses on a small budget can make affordable, minor changes. If you know where to upgrade your retail store, your updates will help your business grow. Try these seven tips for modernizing your shop.

1. Tidy Up Your Store

Cleaning up your retail space costs little to no money. Yet, it makes a big difference. Wipe down dust and clear the floors. Get rid of any extra clutter on your desks and counters. Organize your backrooms so you can do your job more efficiently.

2. Accept Card and Mobile Payments

While only 12 percent of customers prefer to pay with cash, 77 percent choose payment cards. If you don’t have a credit card reader, you miss out on customers who only use cards to pay. An EMV card reader accepts regular cards, cards with chips and mobile payments. We offer a machine that takes all major cards at a low rate.

forms of payment

3. Update Your Store Signs

Refresh your store’s outside appearance with new signs. Depending on your skills and resources, you could go to a printing store or create one by hand. Make sure customers can easily read your signs. The signs should also be made of durable materials that resists bad weather.

4. Change the Inside of the Store

Creating a new inside appearance costs little to no money. Try different shelving and aisle layouts. Put eye-catching products in your windows or at the entrance. Create a fresher look in your store using low-cost techniques like re-painting the walls, changing lightbulbs to LEDs, and power washing the floors.

5. Start a Loyalty Program

Many retail chains have a loyalty card customers can use to save money. They run members-only specials that keep card owners coming back. Starting a program on your own costs money. However, you can join a nationwide discount program like BR Club for free when you buy a National Retail Solutions POS+ system. This free loyalty program works like the ones at chain stores.

6. Create Online Store Information

business facebook page

Plenty of customers use the Internet to find stores in their areas and look up opening hours. If you don’t have basic information about your store online, how can they know about your business? You don’t have to pay for a website to get your to appear in search results. Create a free Facebook page that has your contact information and hours. Google lets you add your business to their map and search results for no cost.

7. Get a Modern Point of Sale (POS) System

A POS system has hardware and software that help you manage your sales. Our POS+ system checks out customers, handles prices and tracks your profits. It makes your store more modern by speeding up average check-out time, and helping you stay on top of your important business numbers. Our All-in-One POS System includes the hardware and training you need to grow. We understand small businesses have tight budgets, so we offer it at a low price. Buy our POS online to keep up with the competition. Request a quote to learn more about our pricing.

Categories
Retail News

Most Profitable Small Businesses in 2018

2018 profitable business

Are you considering starting a small business? Do you want to learn more about the competition for your existing small business? Knowing which industries earn the most money this year will help you make smart decisions. The following five types of small businesses are all sure to earn money in 2018.

1. Coffee Shops

Last year, almost half of all coffee customers drank the beverage outside of their homes. Many of these people drink specialty coffee, but you can also earn money by selling regular brewed coffee.

To compete with big coffee chains, give your cafe a unique theme that will help you stand out and make customers excited to visit you. In addition, try to find a location that plenty of people pass by on a regular basis, giving them a chance to get coffee while they travel.

2. Smoke/Vape Shops

As more people begin to view vaping in a positive light, there’s no better time to get into the e-cigarette or vape industry. The market is set to grow by over 20 percent and will reach around $61 billion in value by 2025. Exciting flavor varieties and flexible vape kits prove to be enticing features for potential customers, so make sure you provide a range of products for every kind of customer.

3. Bike Stores

Every year, Americans spend $81 billion on bike products and services. Biking is popular because it keeps people healthy and reduces car traffic in addition to the equipment costing less to maintain. Many customers like to ride electronic-powered bikes, but you can also earn a profit selling pedal bikes. Some owners with the right tools and skills offer bike repair services, while entrepreneurs who live in areas with many tourists provide bike rentals.

bike products and services

4. Bakeries

Bakeries across the country saw a total of $31 billion in combined revenue in the past year, while industry growth is projected to increase at eight percent between 2016 and 2026. Many sales come from weddings and other formal events, but you can also make a profit selling baked goods to individuals.

5. Beauty Salons

The $445 billion beauty industry is an excellent choice for any entrepreneur and is more diverse than you might think. Hair salons and barber shops, tanning salons, spas and massage clinics, waxing franchises and many more specialties are all expected to enjoy significant job growth.

Beauty and cosmetology will always be in high demand and can provide you with a fantastic business opportunity. No matter what you plan to specialize in, you can reap the rewards of a large customer base by opening a beauty salon of some kind, as long as you present your products and services correctly to draw attention and interest.

booming beauty industry

Point of Sale System for Small Businesses

A point of sale (POS) system like the National Retail Solutions POS+ makes managing your sales and inventory simple. At NRS, we help small businesses like yours succeed. Buy the POS+ today or request a quote for extra equipment.

Categories
Small Business Tips

9 Loyalty Programs and Why Your Small Business Needs One

loyalty programs

 

When more than 80 percent of consumers surveyed last year stated they’re loyal to brands — and therefore buy only from those brands — a business owner’s mind should start churning.

In particular, small businesses or family-owned operations have a lot to gain from increasing customer loyalty. Aside from driving stronger sales, a sense of loyalty builds a relationship with your business well beyond the checkout counter. It keeps your small business top-of-mind, deepens positive impressions and increases the perceived value of your products or services — all because you’ve tapped into someone’s sense of familiarity and commitment.

With an active loyalty program, you can achieve this. This business strategy works to encourage and reward frequent interactions between you and a target customer. The more a customer shops and purchases, the more rewards they rack up.

Yet the value of a customer loyalty program for small businesses doesn’t stop there — not to mention, there are many types of loyalty incentives you can set up. Read on to learn the pros and cons of some of today’s most effective small business rewards programs and how they benefit both you and your customers.

loyalty program types

1. Referral Incentive Programs

customer referral program

 

Referral incentives are an outstanding way to activate your current consumer base and gain fresh, cost-effective leads. They’re also relatively straightforward, as their premise relies on basic word-of-mouth principles — a customer recommends your business or product to someone else, and you receive a notice of the recommendation. In return, the referrer earns a reward if their actions result in a successful new customer for you.

Most small businesses set up referral programs on their websites, using a specific page or online form a customer fills out with their contact information and the information of the friend, family member or associate they think will benefit from your services.

You can highlight this page across your website and social media channels, with direct links that make it easy for someone to find. It should be just as easy for someone to see what they’ll potentially earn as a result of the referral, be it a store coupon, gift cards or unique insider merchandise.

Referral programs work well because they check two business boxes. First, you are practicing a highly cost-effective form of lead generation without spending a lot of money. Second, referrals signal you already have some hyper-committed customers who love you so much, they freely tell others about you. The power of recommendations from trusted sources remains the strongest form of advertising today. Referral programs set the standard for this.

Pros of Referral Incentives

 

referral pros

 

  • Instantly boost your business’ trust factor and reputation in front of a new audience
  • Costs up to 90 percent less than traditional forms of advertising
  • Produces higher lifetime-value customers than traditional forms of advertising, with referred customers spending, on average, 13 percent more annually than regular customers
  • Doubly rewards your current customers — a tangible gift, plus the psychological boost that they’re helping friends and family
  • Twofold rewards your potential new customer — incentivize them with a first-time shopper discount of their own, on top of instilling the feeling of being sought after

Cons of Referral Incentives

 

referral cons

 

  • Are typically short-term, incentivizing early connection over retention
  • Usually little incentive after that first collaboration
  • No guarantee the referred individual will turn into a repeat customer

2. Punch Card Programs

Punch cards are another leading marketing strategy to keep customers physically and emotionally returning to your small business. That’s because they’re one of the most concrete approaches to cultivate loyalty, offering a way for people to see real progress after each purchase and work toward a defined goal.

Loyalty cards work in several different formats. The most common cards are hole-punched or stamp-based, meaning customers receive a business card that gets a hole, ink stamp or some other physical marker recording the number of commercial transactions. After they earn enough punches or purchases, cardholders receive a freebie.

Punch cards work particularly well for restaurants and hospitality services, from coffee shops and bakeries to nail salons and spas. That’s because every time a customer stops in and buys a latte or gets a pedicure, they also receive a mark. Those marks add up, encouraging that individual to use your business and only your business to satisfy a particular need.

More and more, businesses are using digital punch cards to complement this tactic as well. If you have a website that sells merchandise alongside a physical storefront, make sure punch cards are somehow digitally compatible, perhaps with a card account number they can input at checkout. That way, no matter how a returning customer chooses to engage with you, that support gets recognized.

 

punch card programs

 

Pros of Punch Cards

  • Increased customer retention rates, as a first-time patron has an immediate incentive to return.
  • Increased sales as individuals look to work through their cards. The faster they do, the faster they earn a free good or service.
  • Opportunities for greater product awareness and promotion. For example, say you’re a food truck owner with a new line of desserts on the menu. Cardholders can get an additional stamp if they purchase a dessert, which in turn means future chances of cross-selling since the customer is now familiar with the new product.

Cons of Punch Cards

  • Higher chance of customer incidents or complaints if transactions get missed or physical cards get lost
  • Glean few marketing insights or purchasing data from your customers, beyond these routine transactions
  • Difficult business balance to strike between giving customers freebies they would already buy on their own and persuading them to invest in goods and services they typically wouldn’t

3. Cash-Back Programs

Cash-back loyalty programs have thrived in industries like retail and finance for decades, thanks to the straightforward and stable rewards model they offer. Just as their name suggests, cash-back programs give customers money back in exchange for spending on certain items or services. These can be anything from plane tickets and denim jeans to running shoes and pet shampoo. The more a customer spends, the more they earn back.

There are two common variations of cash-back loyalty programs. The first is a cash equivalency, which states a customer will get a flat rate of money in return for spending a certain amount. For example, every time a member spends $50, they earn $10 back. They redeem that $10 through vouchers to use when they return to shop.

The second type of cash-back loyalty relies on percentages rather than flat sums. In this program, a loyalty member may earn anywhere between one and five percent return on every purchase they make. These kinds of cash incentives compound and could potentially mean more rewards for a customer, depending on their spending habits, plus offer a sense of autonomy that they can spend as much or as little as they like and still earn rewards.

In essence, both models trade a little extra business for a little extra pocket money, which many consumers have a hard time turning down. They’re easy to install at your registers and point-of-sale systems.

 

cash back program

 

Pros of Cash-Back Programs

  • An immediate value proposition, as participants know what they’re earning and can start right away
  • A sharpened sense of consumer control, since they get to decide how much they buy and — subsequently — how many rewards they earn
  • Easily understandable to the average shopper
  • Flexible and adaptable across business models, with the ability to tailor cash-back rewards to different target spenders
  • Can integrate into a general content-marketing strategy, since cash-back vouchers typically get sent through email or packaged alongside other promotional materials

Cons of Cash-Back Programs

  • Relevant mainly for physical goods and hard products
  • Often come with expiration dates for voucher or cash redemption, which may be off-putting to program members who don’t use them in time
  • Can be challenging to manage without the proper computerized inventory and sales systems overseeing the program
  • Evenly rewards high-lifetime value and low-lifetime value customers alike, which may not be advantageous to the state of your small business

4. Points Programs

Points-based systems remain one of the most popular commercial reward mechanisms on the market. They allow individuals to accrue points the more they shop at or visit your small business, encouraging brand loyalty without seeming pushy or setting voucher limits.

Point systems are intuitive ways to encourage repeat engagement in a clear and understandable format. They also mitigate a few of the problems other customer loyalty programs court, including a lack of ongoing incentives or treating your most valued and your least reliable customers the same.

The simplest of these models rely on an equation that clearly states what a certain number of points translates into. Customers don’t have to mentally wrangle with conversions or calculations on the spot. They already know 10 points equal $1 off their next purchase, or five visits equal a complimentary service.

What’s more, these points equations are open to upgrades. You can track customers who have been in the program longest or individuals with the highest annual points accrual, rewarding them with even further goodies.

Points systems are especially attractive for small businesses looking to beef up their digital presence. You can award points to customers who like your social media pages, share your posts, download your new mobile app or write your business a positive review. That means individuals don’t even necessarily need to stop in for you to reap the benefits of their loyalty. Such cross-packaging advantages to points-based loyalty systems are part of the reason they remain stronger than ever.

 

loyalty point system

 

Pros of Point Systems

  • Versatility and customization
  • Compatible with your marketing campaigns — aside from earning points based on everyday transactions, your small business can create unique promo campaigns, bonus point days and more to further encourage loyalty members’ engagement
  • Negates the problem of program “free riders,” or those who don’t bring in high-value business after signing up for a loyalty program
  • Allows you to track purchasing data and customer preferences so you can make more informed business decisions

Cons of Point Systems

  • Work best in retail operations and small businesses that process large volumes of smaller, routine transactions, such as gas stations or grocery stores — not necessarily in higher-cost commercial or service-based industries
  • Proper storage and oversight of points and points-based rewards
  • The saturation of similar loyalty operations among your industry competitors, making your version likely to get lost in the noise
  • Overly complicated or rule-stringed point accruals that cause your customers more headaches than happiness

5. Tiered Loyalty Programs

Tiered customer reward programs work by sending bonuses, treats and special offerings to individuals based on their loyalty ranking. That ranking gets based on their history of engagement, from their visits to your small business and their spending amounts to how much they engage with your social media content.

One of the most iconic tiered-customer loyalty examples comes from the coffee conglomerate Starbucks. It’s free to join, and members gain points to unlock the next level of membership. Each of these levels comes with unique features and advantages. It’s a rewards model that mixes bits and pieces from points, cards and cash-back systems alike, yet ultimately aims to drive increased-value customer retention with its highest-level “gold” membership.

Other tiered programs use a small, up-front membership fee that unlocks the entire range of membership perks right off the bat. Likewise, you can tier these membership subscriptions themselves to let customers pick what level they want to start at — or even go buffet-style, allowing them mix-and-match insider discounts, information and access to exclusive deals at their discretion. The choice is up to your sales-management resources and strategic direction.

 

 

tiered loyalty system

 

Pros of Tiered Customer Programs

  • Allows for content marketing cross-promotions — you have access to information like emails and mailing addresses, which you can use to send additional incentivizing material
  • Allows for customer segmentation, which means sharper marketing strategies and more tailored promotional opportunities. You send product offerings only to the most relevant membership segment, which increases the chance of your small business seeing a return on its advertising investments.
  • Better balance of short-term and long-term reward models — immediate rewards, such as a $5 store coupon, can incentivize joining the tiered program. Yet this model best prioritizes customers who purchase more goods or services at higher values, allowing them to earn a better loyalty ranking and therefore unlock more valuable gifts.
  • Gives priority attention to your highest-value clients without sacrificing new or moderately engaged consumers

Cons of Tiered Customer Programs

  • Can be easy to forget, especially if customers don’t shop frequently enough to climb the loyalty ladder
  • Risks customer dissatisfaction if the length of time between earning and redeeming membership benefits runs too long
  • Risks customer dissatisfaction if they get demoted within their membership, which some programs have been known to do
  • Can be more time-consuming and expensive to operate and maintain than other loyalty systems

6. Coalition Loyalty Programs

Coalition or partnership programs let you and other businesses in your area work together to drive higher customer retention. Managed collectively by you and the others in the group, the program allows each member business to pool advertising resources and promotional events for the benefit of all. These coalitions might not only share promotions and coupons, but they cross-advertise each other’s deals, share consumer insights and further incentivize visiting the other small businesses in the group.

Coalitions work best in conjunction with technology. Nowadays, many coalitions have customers use swipe cards or download a QR code onto their smartphones, which gives them direct access to the most recent lineup of deals and offerings. The program also allows customers to scan these barcodes and cards at the counter to build up coalition loyalty points — a double perk for your small business since you can opt to share subsequent consumer data among your partners and make better business decisions.

While not required, coalition loyalty programs gain quicker traction if you can team up with complementary businesses in your area. While these businesses don’t have to be in your exact line of work, they should intuitively appeal to the same kinds of customers. For example, say you own a deli and are looking to draw in more foot traffic. You might consider partnering with a neighborhood bakery, a nearby gas station or perhaps even the convenience store down the road. These places already appeal to your everyday shopper and mean immediate cross-promotional opportunities.

 

coalition loyalty program

 

Pros of Coalition Loyalty

  • Broader brand awareness and reach
  • Freedom and flexibility for your customers
  • The ability for those customers to earn their rewards or discounts more quickly
  • Knowledge of a tremendous amount of customer spending habits and behaviors — well more than you could learn on your own
  • A boost in the community’s positive perception of your small business

Cons of Coalition Loyalty

  • Lack of complete program autonomy — the coalition must approve all details, promotions and communications as mutually beneficial for all
  • Customers may earn points with you but want to use them elsewhere
  • Higher operating costs without the right business infrastructure, like computers or software, plus higher exit costs if you chose to leave the program
  • The program can be legally and logistically tricky to set up

7. Gamification Programs

A fancy word for a powerful program, gamification is the process in which businesses use games and gaming strategies to motivate customer commitment. And while the term might be new, the application is not. Nearly 87 percent of retailers in a North American survey had gamification principles on their mind and intended to use them to engage more customers in the upcoming five years.

If this sounds off-brand for your market, think again. There are many ways your small business probably uses gamification already without realizing it. In fact, any attempt you’ve made to drum up attention, brand narratives, inspire competition or instill rewards could be taking cues from game elements, often with surprising effects.

Features like “checking in” to your business online, assigning badges for frequent customers or enacting a prize drawing or annual giveaway at your point-of-sales register system are all based in gamification. They allow consumers to feel both special and accomplished, that their time and attention with your small business has the potential to turn into something more. By weaving gamification strategies into your business’ marketing model, you can tap into this consumer drive, channeling it into brand evangelism and encouraging further action.

Pros of Gamification

  • Better understand the motivations, reactions and emotions of your customers
  • Craft communications with a more distinct brand personality
  • Cultivate a two-way relationship with consumers who see their happiness and success as tied to yours

Cons of Gamification

  • Requires a strong digital fluency and presence, particularly with social media
  • Takes a lot of effort and daily maintenance
  • Prone to variability, as gamification strategies rely on two-way communication with customers

8. Non-Monetary Rewards

Non-monetary-based incentives are yet another customer loyalty program small businesses use. Their strength lies not in motivating people through cash or points, but in giving value-based rewards to individuals who shop with you.

That may sound like an odd strategy. After all, how do you entice shoppers to buy more or engage with your small business without increasing the power of their wallet when they do so? Non-monetary reward systems not only benefit your business in the short and long term, but they quickly become a way to set yourself apart from local competition.

Consider the many ways you could offer special insider perks that have nothing to do with cash. You could build special online ordering accounts or offer free at-home delivery to your best customers. You could host fundraisers or set up a charity fund to aid a local school or nonprofit. You could become a community drop-off site where people bring in hard-to-recycle household items, like old batteries. The idea here is the more you can connect with your everyday shopper and make their life a little easier, the better.

 

non-monetary rewards

 

Pros of Non-Monetary Reward Systems

  • Directly taps into consumers’ values and beliefs — a key to establishing genuine trust and brand commitment
  • Matches lifestyles and associates your small business with someone’s everyday sense of self
  • Shows the authenticity of your business beyond merely making money — especially attractive for small or family-owned businesses, which can use non-monetary perks to build a stronger altruistic identity, highlight community involvement and show how much they put people first.

Cons of Non-Monetary Reward Systems

  • They must connect with a target audience that values what you’re incentivizing — otherwise, the initiative falls flat
  • Can be challenging to gain early momentum to see the widespread impact of your non-monetary reward program
  • Can fall out of touch with what your local consumers really want from their places of business

9. Consumer Packaged Goods (CPG) Coupon Programs

Last but not least, consumer packaged goods (CPG) coupon programs round out the ways your small business can leverage loyalty and build a larger, stronger customer base.

Large CPG companies consistently offer nationwide coupons that can be claimed at any store. Small businesses can take advantage of coupon programs by selling the items manufactured by CPGs when there are active coupons for these items. This is attractive because CPG companies make the items that your customers know the best. Think of items like Coca-Cola, Pepsi, Red Bull, Poland Spring, Doritos…These are the hottest selling items on the market. And the best part? CPG companies will cover the cost of the coupons!

There are coupon aggregators that offer customers a database of printable CPG coupons. Customers can then bring those printed coupons to your store and use them there if you store sells the products listed on the coupons. Other companies like National Retail Solutions created their own nationwide coupon program that your store can join when you buy their POS system.

Pros of CPG Discounts

  • Practical and easy to join
  • Rewards customers for basic purchases, making it likely they’ll return to your store for their staple shopping
  • No loss of profits or revenue from the discounted items you sell
  • No extra work for you, since everything is connected automatically to your point-of-sale system

Cons of CPG Discounts

  • Can only offer discounts on items chosen for you that week or month
  • Customers must know your small business is part of a CPG BR discount club
  • Customers must readily see the discounted items advertised to know what they can buy that week

Small Businesses Don’t Act “Small” With Strong Customer Loyalty Programs. We Can Help.

Reward your customers for shopping at your store, and they’ll keep on doing it. Make it simple and easy for your customers to earn rewards and save money, and your business will truly stand out!

Contact National Retail Solutions today to discuss our all-in-one Point of Sale system and how it can make your customers’ shopping experience even better. Our Point of Sale (POS) Bundle is an industry leader. The POS bundle includes everything necessary for a fast and easy checkout, including state-of-the-art software, heavy-duty hardware and integration with the BR Club™ store loyalty program. BR Club™ is a creative rewards system that makes it easier to deliver the goods and services your customers want — and be the small business they return to, time and time again.

Categories
Small Business Tips

How to Engage Customers in Conversation

How to Engage Customers in Conversation

Excellent customer engagement increases sales and loyalty. Many businesses use technology to keep customers engaged, but you don’t have to use it to keep up with them. If you don’t understand technology well, you can engage your customers in person. These tips will help you effectively talk to anyone who visits your store.

Remember that this blog post provides general advice for stores in America. Your customers’ preferences will depend on their cultural background. You know your community better than anyone else. Try out the methods you think will work and change them to suit your customers’ needs. If you live in a diverse neighborhood, you might have to use different strategies for different people. Here are four tips to get you started.

1. Greet Your Customers

When a customer enters your store, greeting them makes them feel welcome. It also lets them feel more comfortable asking for help when they need it. A customer might not always know where you are when they first come in. Even a quick “hello” gives them a good idea of where to find an employee. Try changing your greetings based on different customers. If you see someone who visits on a regular basis, call them by name or say “welcome back.”

 

welcome your customers

2. Talk About Community News

Have basic conversations with your customers that they understand. Talking about news and events in the community lets them know you care about their neighborhood. Telling them to stay warm in the winter or cool in the summer helps them understand you want them to be comfortable. You could even keep track of any road or public transport closings nearby and tell your customers about them.

3. Use Positive Language

Customers respond better to positive responses, especially when they have a concern. Try to avoid using words like “can’t,” or “don’t.” Replace them with language that shows you want to fix the problem. For example, if you don’t take returns, let them know about other ways you can help them solve the issue.

Look at these other examples:

  • “Let me find out.” instead of “I don’t know.”
  • “Do you need any more help?” instead of “Is that all?”
  • “Have you tried this alternative item?” instead of “We don’t have that item.”

This strategy might take some practice — especially if you’re not a native English speaker. To make it less overwhelming, try changing your language a little bit at a time.

 

use positive phrases

4. Create Chances to Help

Some customers don’t feel comfortable asking employees questions. To make it easier for them, give them a chance to get assistance. When you see a customer shopping, ask them if they need help finding anything. If that method feels too pushy for you, ask them if they found everything they needed when they check out. You could also tell them about your sales if they buy an item that has a current deal.

Get More Time to Focus on Customers

A point of sale system saves you time on managing your store numbers and on checking out customers. The National Retail Solutions POS+ system gives users more time to pay attention to their customers. Request a quote for pricing information or buy it online.