Can Your Multi-Location Business Answer These Seven Questions?

If the answer to all seven is “Yes, we can answer that question,” your multi-location business has a firm grasp on customer engagement and relationship management.

If the answer to any is “No, we can’t,” now might be a good time to start investigating how to address this opportunity. Those multi-location merchants that do have a firm grasp on customer engagement and relationship management are best situated to increase revenue and reduce customer churn. Here’s why:

1) What percent of customers are super loyal, regulars, and at-risk?

The definitions, just so we’re all on the same page:

  • Super loyal – customers who come more than habitually*
  • Regulars – customers who come habitually
  • At-risk – customers who used to come habitually, but now have stopped

*(For those businesses that don’t have a grasp on what constitutes “habitually,” just input average frequency of loyal customer visits).

The reason why a “Yes” here is crucial: each of these customer types requires a different treatment – and none more so than the “At-risk” bucket. Identifying At-risk customers early on ensures that a business can capture these folks before they take their business somewhere else.

If a business doesn’t have a grasp on these percentages, there’s no way to know the long-term health of the business or how to develop personalized marketing campaigns that are so crucial for long-term success. Revenue walks out a “No” business’s door every single day – and management has no idea.

2) What percent of my customers visit more than once?

The reason why a “Yes” here is so powerful is that repeat visits are the single best way to increase customer lifetime value.

Essentially, the risk of a “No” is that a multi-location business cannot differentiate between first-time and repeat customers – i.e. every single customer visit gets treated the same. Problematic, since converting a first-time customer into a repeat customer immediately impacts the bottom line, from not only revenue but also referrals and overall brand awareness. Moreover, treating a repeat customer as a first-timer will make a loyalist feel unappreciated. Finally, tracking the success of marketing campaigns, branding initiatives, or anything else becomes extremely challenging. Everything is just “marketing,” rather than acquisition vs. retention.

3) How does average check differ across locations?

With a “Yes,” management has complete visibility into the performance of each regional branch – crucial for sharing best practices and creating a culture of success.

With a “No,” management risks minimizing the concept of “brand value.” There’s no way to ensure consistency of customer experience from one location to another. A business becomes the brand equivalent of a basketball team that doesn’t pass to one another. There’s no fluidity, no support, no cohesion, and overall performance suffers.

4) How does weekday traffic compare to weekend traffic?

With a “Yes,” a multi-location merchant puts itself in the perfect position to control fluctuations in business activity. At best, a “No” means that a business does not have control over revenue. At worst, a “No” means that a business struggles to understand the predictable nature of its revenue– making important business functions like forecasting very challenging.

Think of it this way: a “Yes” and “No” business start seeing higher than usual traffic on Wednesday. The “Yes” business can verify that this uptick comes from weekend customers who are open to increasing their relationship with that merchant – cut to that multi-location business’s marketing team salivating. A “No” business has nowhere to start – so that the marketing team can only guess, which wastes resources and time.

5) What percent of customers shop at more than one location?

Businesses who are a “Yes” have a firm understanding of the value of their brand. When a customer shops at more than one location, that customer is seeking a brand out of preference, not out of convenience. The preference relationship is significantly stronger and should be a goal for long-term success.

With a “No,” understanding brand value becomes much more difficult. A first-time customer to a new location could be the brand’s most loyal patron. Think of the consequences if that patron has a poor experience and checks out another competitor in the area.

6) Are top customers by revenue contribution generally those who spend more or those visit more often?

Every multi-location business has two aims:

  1. Increase the amount customers spend with each purchase
  2. Increase the frequency that customers purchase

But which one matters more? If a “No” business focuses on increasing visits, but average spend is actually more important for customer lifetime value, they’re swimming upstream. “Yes” businesses can confidently design marketing programs that will maximize long-term value.

7) What percent of revenue is generated by my top 25% of customers?

All customers are not created equal, no matter what type of business. To be clear, the overwhelming majority of every business’s revenue comes from a small subset of customers. A “Yes” businesses know this and can ensure that these high-value individuals continue to feel appreciated. A “No” merchant, unfortunately, cannot.

Think of it this way – imagine that a customer sends an email to management making a totally unreasonable complaint about a recent visit. The email is snarky and mean. The “Yes” business looks up this customer and sees that he is the merchant’s single biggest contributor of revenue. This customer receives a response asking him if a free item at his next visit can help cheer him up. Extremely grateful that his favorite business cares, he admits that he had a bad day and comes in within an hour.

A “No” business? Well, it might reply and blow off the customer as a jerk. The customer, already in a foul mood, decides to go somewhere else, taking 2% of monthly revenue with him.

BONUS – What should I do about it?

This is the fun part about running a business. If the answer to each of the above seven questions is “Yes,” the multi-location merchant can focus on what’s important: doing something about it, increasing the value of the business, and fostering better relationships with customers.

If the answer to any of the above is a “No,” don’t despair. The single best way to gain this insight is to see if now is the right time to launch a customer loyalty program. Technology has evolved to give tools to brick-and-mortar multi-location businesses that can provide a “Yes” to all of the above.

And for those that are curious? Stay tuned to the customer retention and loyalty blog (we’ve got an eBook called “6 Stats For Customer Loyalty” that you’re going to definitely want to see):

To learn more, get our free Ultimate Guide to Customer Engagement.