Budget planning: how to play the long game

Posted: Tuesday 17th February 2015 in Retail Strategy, Thought Leadership.
Money

Channelling budget into customer research will reap long term rewards

Honestly, how many retailers can put up their hands when asked whether they genuinely understand their customers and the purchase journeys they make?  As retail professionals, shouldn’t we all be able to answer this question so we know where to place our marketing resource and effort?

Maintaining investment in insights and planning is more easily said than done, I accept that.  I also accept that it is more difficult than ever at this particular time, where today’s trading environment is unpredictable. But I’d argue that now, more than at other times, there is a pressing need to understand the plethora of customer facets; their motivations, their choices, their attitudes, their behaviours, and most taxingly, their shopping journeys.  Never before have customers been so complicated to understand, because never before have they been provided with so much choice in terms of what to buy, when to buy, where to buy and how to buy.

Consequently, it is easier than ever for retailers to get their focus wrong, that is, in terms of where to best place their time, budget and efforts.

So is the answer to avoid investing in customer research? To my mind, it’s a resounding no.  Board members need to hold their nerve and be smart when making decisions on how to balance the budgets between direct response and planning. Intelligence on their customers should be one of the areas they defend and grow, regularly reference, and use to navigate their businesses through turbulent times.  They should let their competition fall into the trap of shooting arrows in the dark.

The inevitable conclusion to this quandary is that retailers who don’t have up to date information on what engages and drives their customers, more often than not, are the ones that turn to discounting to fix their short term sales problems. And although discounting can often remedy an unwanted headache, it won’t shift a lingering virus.

Boards need to hold customer data at the heart of their business and use it to inform planning, trading and marketing. And if they do they will be rewarded with a healthier, smarter and more profitable business in the longer term.

If you have any questions or would like to know more about long term retail budget planning contact Neil Collins on 0203 428 5307.


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