The ZenMango blog is back. Had to take time off to finish the book Marperations®, which is finally completed. Also have been planning to blog in a way that will be more relevant today and have some cool ideas that will launch in the next month.
As I restart the blog, I want to start with the basic fundamental element that defines and measures every businesses success. Most businesses have numerous KPI’s (Key Performance Indicators). They are trended and measured against benchmarks. But what is the one thing that is most critical to measure?
TRAFFIC DEFINES BUSINESS SUCCESS
When I look at a brand’s success, it is all about transactions or traffic. That is the one number measure that is real. Think, even for a single store operator, success is defined by how many times they open the cash register and how much they put in every time. If they are opening the cash register fewer times every day, they should be worried right away.
WHAT HAPPENS WHEN TRAFFIC STARTS TO DECLINE
I have seen that there is a lag between traffic starting to decline and the realization that “something is really wrong.” In many a case, when traffic starts to decline, there is a dial that marketers have easy access to, called “price.” Often they will increase price to offset the traffic decline. As a result sales remain flat and it appears there is no imminent danger or challenges to the brand.
Now think from the consumers’ point of view, what is going on. Of course the brand is not operating at its best and because of that a group of customers are not coming back causing the traffic decline. The remaining customer groups, who are loyal through the tough times, are “taxed” with a price increase to maintain sales levels. The higher price may push a sizable group of the loyalists to stop coming in, and that will cause further decrease in traffic. At that point there is no price increase that will help sustain sales.
WHAT ACTIONS SHOULD YOU CONSIDER TO FIX DECLINING TRANSACTIONS
First and foremost detect it when it is in its early stage. Find where it is concentrated: if it is happening in a few specific markets, newer brands, or some other focused area.
Once you have a clear idea where the problem is stemming from, the most important thing you can do is to decide what NOT to do. I always advise marketers to stop putting marketing dollars in a down market. The reason is very simple: putting money in a down market is similar to inviting customers to come and experience the brand when there are service challenges. You will create rejecters at a higher rate if you do so. So pause marketing, invest in learning why customers are not coming back, and fix that. Then, and only then, should you invest in marketing to ask customers to come back and experience the brand again.
Again, I am excited to return to blogging and I thank you for reading the blog. Please share with me how measuring traffic count has defined your business’s success.