1. 1
Retail businesses can boost their customer loyalty by adapting bespoke marketing strategies that can be
designed to create a personalized shopping experience for customers through insights from their data by
leveraging Business Intelligence tools and Advanced Analytics.
- Smartmonk Innovations
Adapting Business Intelligence(BI) and
Advanced Analytics for the Retail Industry to
boost customer loyalty.
- The official Game Changing strategy of the decade for boosting sales and customer loyalty.

2. Retailers have access to an oceanic amount of
data. They capture transaction data everyday from
every stock keeping unit (SKU) about every sale,
every customer and every store. The companies
with access to such vast data have been using
very sophisticated market research and
operational process techniques to find answers to
a variety of questions such as: What Products?
How much? Which location? What discounts on
which products and where?
In addition to this specific data and market
research at their disposal these companies now
have insights from social media and other similar
data sets. The potential in this data can be
leveraged by Business Intelligence (BI) and
Advanced Analytics to turn this wealth of
information into actual value and decision making
insights. Data powered by advanced analytics
allow companies to make better, faster decisions
in their day-to-day business and deliver improved
performance.
The fierce competition in the retail sector has
brought to light the importance of customer
loyalty for the retailers and this can be achieved
by mining volumes of data and empowering it
with analytics and Business Intelligence to gain
valuable insights into customer behavior and
trends. This will in-turn help making decisions
and building strategies that are loyalty inducing
by creating a personalized shopping experience
that recognizes individual customers, offer
customized discounts and treatment.
We have extensively researched customer
loyalty, its significance for retailers and have
utmost knowledge on the analytical solutions that
need to be carefully adopted to drive customer
loyalty.
Smartmonk foresees a great potential for the
retailers that adopt Business Intelligence tools and
advanced analytics as a platform for growth.
Under a brilliant team, a data and analytics
initiative can yield amusing rewards for retailers.
We believe a company that is in the process of
building capabilities and strategies to become a
more customer centric and an analytically driven
enterprise has an edge in the retail industry in
these times of economic uncertainty and
decreasing margins.
CUSTOMER LOYALTY
AND ITS
SIGNIFICANCE
The challenging and uncertain economy has been
forcing retailers to fish for new ways to acquire
new customers as well as boost loyalty in existing
customers. Many Big Ticket retailers have been
investing billions of dollars on loyalty and reward
programs over the years to attract a retain their
most desired customers but many reward points
still go unredeemed or expire without the
customers knowledge. The program benefits also
usually go unnoticed.
As loyalty is specifically a very important goal for
retailers, almost all the retail giants like Amazon,
Target, Walmart and alike have made analytics
and Business Intelligence(BI) a key ingredient
in their marketing strategies.

3. 3
According to research by several industry experts
and research organizations:
The cost of acquiring a new customer can
cost an organization 7 times more than
retaining an existing customer*
A 5% increase in customer retention results
in a 25% to 100% increase in
profitability*
80% of your company's revenue will come
from just 20% of your customers*
Probability of selling to an existing
customer is 60 - 70%. The probability of
selling to a new prospect is 5 - 20%*
Businesses only attribute 21% of customer
churn to poor customer service while it
actually is 70%. This is also one of the
major contributors to a decline in
customer loyalty stats on any retailers
chart.*
Companies that prioritize customer service,
experience and other loyalty based
initiatives generate 60% more revenue
than their competition.*
91% of customers who move over to a
fellow retailer for their needs usually do
not move back to their previous retailer. It
is very important to retain customers as
the fierce competition in the retail sector
are always on their toes to acquire a new
customer.*
Building Customer
loyalty from Data
Insights using Analytics
& Business Intelligence
Business Intelligence and Advanced Analytic
tools can assist retailers to connect with
customers at every stage of the whole eco-system
by generating insights from the data patterns and
in-turn make real time decisions and process them
into effective frontline action.
Adopting Advanced analytic tools also allow
enterprises to make better, faster day-to-day
business decisions and show amusing results. A
multinational company for instance,
revolutionized its retailer-specific businesses and
marketing plans: by applying advanced analytics
to consumer data, the insights from the process
determined better selling Stock Keeping Unit's
from non selling ones and their retail formats.
Also it provided insights and information on
which Stock Keeping Unit to swap in and out to
enhance customer experience. The multinational
has now achieved 10 percent sales growth in a
low-growth category. The impact was not just in
sales but also in enhancing customer experience,
retaining the customers and building their loyalty.

4. In a recent research by McKinsey and MIT: The
trends show that companies that have adopted BI
and Advanced analytical tools into their
operations have outperformed their peers by 5
percent in overall productivity and 6 percent in
revenue in the first quarter itself.
Smartmonk Innovations director Mr. Nagi Reddy,
discusses how consumer-facing companies can use data and
analytics to generate insights and turn them into effective
frontline action.
Smartmonk's approach to Customer Loyalty
Analysis integrates extensive research on the
organizations revenue trends, data mining with
bespoke analytic techniques to identify the factors
that are driving customer interests, conversion
and loyalty for each of your customer segments.
There is an enormous opportunity in the waiting
to achieve customer loyalty through this
approach. Retailers by integrating and adopting
these tools into the organizations working can:
develop bespoke pricing strategies that do
not dent the profitability of the company
as well as stay competitive.
Understand prospective customers and
deliver customized marketing strategies to
acquire them.
Identifying key growth areas and deliver
targeted advertising, offers and building a
strategy to motivate buyers.
Channeling marketing investments and
budget allocations across specifically
identified growth mediums.
Customer segmentation and profiling to
identify their profitable customers and
promote tailor made offers to the
identified target audience.
Reward loyal customers by serving offers
that are more in line with the customers
need.
So, the data and the insights gained from it
allows the retailers to not just give a blanket offer
to lots of people, but rather specific offers within
specific groups based on their purchasing activity
and their research regarding the products they
want to buy.
*Image Courtesy: CIO INSIGHT

5. 5
The Loyalty Challenge
Building customer loyalty can be a challenging
endeavor. Unfortunately, a majority of the loyalty
programs fail and promotions do not reach their
targeted goals due to limited or wrong insights
sometimes driven by human calculations and
experience. The effectiveness of the program is
not thoroughly understood and an inability to
understand member behavior caused by loyalty
programs and promotions.
The key challenges in implementing analytics for
making data driven decisions to boost customer
loyalty are:
I. Managing the Data:
After the initial process of determining the
specific business decisions they want to improve
and the marketing strategies that need to be
reworked, the retail companies must collect and
manage the data needed to conduct insightful
analysis.
This entails two deliberate actions:
1. Creatively sourcing data
2. Defining data-governance standards
II. Translating the collected data into insights
Managing the data is just the first step. For the
companies to make sense of this vast amount of
data, it requires sophisticated analytic models and
the right people who understand your business.
From our experience at Smartmonk we suggest:
1. One of the business users or the business
owners have to be involved in the initial
model building process.
2. The approach should aim to build the least
complex model that will deliver the
needed insights.
III. Turning insights into effective frontline
action:
Gathering the right data and developing
transparent models, however, won’t yield impact
unless companies can also turn data-driven
insights into effective action on the front line.
Implementing Analytics
at your esteemed
Organization?
We put to work our analytical and BI expertise to
predict future tendencies of customers in order to
develop retention programs.
• Identify and target the most valuable customers
to ensure they become return customers.
• Use analytics not just for online channels but
also within stores.
• Embrace mobile technology as the next big
thing in marketing analytics and incorporate it
into your strategy.
• Improve your social media connection with
customers. Analytics can help retailers understand
customers’ social behavior and provide valuable
insights on what is important to them.

6. Summary
Across industries, companies are facing increased
pressure to grow revenues while holding costs in
check. Identifying and retaining your best
customers has never been more important.
Smartmonk's insights are a unique and
comprehensive analytic solution that helps you
identify your most profitable customers and gain a
better understanding of what drives customer
purchase behavior so that you can increase
customer retention and control loyalty program
costs.
Contact Us
For more information on Smartmonk's retail
analytics and customer retention solutions please
visit smartmonk.co or write to us
info@smartmonk.co.
References
[1] www.data-informed.com
[2] * Statistics used in the article are from Bain & Co
[3] www.popcornmetrics.com
[4] www.cognizant.com