Analyze Your Sales Data
Help Identify Your Best Customers
By Ricardo Harvin
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How do you define what makes a "best" customer for your business and, more importantly, what do you know about your customers and their buying habits?
You shouldn't let a single transaction go by without gaining as much knowledge as you can about who your customers are, why they bought from you, and what you can do to generate bigger, more frequent sales from them in the future.
For most businesses, the easy way to start learning valuable information about your customers is to closely scrutinize the sales receipts. Gather up all your receipts for the past month and enter some basic customer data for each individual sale into a spreadsheet, including name, address (with ZIP code listed separately), and purchase amount.
With just this basic information, you can find out who bought from you most often, who actually spent the most money, whether multiple people from the same address bought from you, and what neighborhoods generated the most sales.
Examining your sales in these different ways can give you a fresh perspective of your business. Are you surprised by who's generating your profit? Do your best customers tend to buy only one or two items, which may indicate that they don't know about all the products and services that you offer? Can you see demographic trends that may indicate opportunities for expansion?
You can break down your receipts even further to track things like the individual items sold in each transaction, the time of year (and the time of day), and whether there were any discounts, coupons, or specials included with the sale that can deepen your insight into what makes your business work.
Paper-based sales records are the most difficult to work with and limit your ability to sort and track data. Using spreadsheet software or an electronic point-of-sale (POS) system that lets you customize and run sales reports makes the task much simpler.
Other options for analyzing your sales include business accounting programs and Customer Relationship Management (CRM) software that can pull data from your existing POS software, with a wide range of database and contact management software choices falling in between in terms of ease-of-use, cost, and complexity.
Whatever method or tool you decide to use, the key is to take a closer look at your sales records and see if your regulars are really your "best" customers in terms of sales and profits, and if you've been neglecting the people who really make the difference to your bottom line.