By Raj Sond, General Manager, First Data Merchant Solutions (FDMS)

Many people who take the leap to set up a business are often driven by a gut instinct to follow their dream, to leave corporate life or to be their own boss. That initial passion and instinct is key in getting an idea off the ground, but once you become a business owner, you can’t rely on instinct alone to guide your decision making.

A recent YouGov study by First Data Merchant Solutions (FDMS) found that over half of SME owners (54%) do not “completely” understand the habits and preferences of their customers, which could be a direct correlation to the 42% of Britain’s SMEs that still go by “feel” to understand their customers, as opposed to using data and analytics.

From these statistics it’s clear that relying on “feel” just isn’t getting to the root of what a customer really desires in their experience. Instead, SME owners need to explore and embrace different ways to collect, manage and analyse the masses of data and knowledge that passes through their business on a daily basis. By tapping into this goldmine of information, business owners can cement solid and prosperous, long-lasting relationships. This data offers a whole host of potential, particularly within the following areas:

A targeted approach

In a parallel survey, 66% of consumers said that being sold a product or service that they were not interested in would be likely to make them leave a store without making a purchase. However, only 33% of SME owners highlighted this as an undesirable factor. Bombarding customers with unwanted goods can be a costly mistake for small businesses who rely heavily on repeat business, it’s clear from the data that SMEs should be wary of how detrimental random targeting can be to retaining custom.

However, if business owners are able to track purchase history, they will be able to accurately track the goods or services that are of interest to their customers specifically. From this, owners can target individual consumers in line with what they have a record of buying, with the data there to prove this strategic decision. By utilising this specific information, long lasting relationships can be secured without becoming a hassle to the people that keep your business alive.

Prioritising payments

The survey also found that whilst SME owners appreciate that “poor customer service” would be likely to turn a customer away from a store, 33% of consumers would leave without a purchase if they didn’t accept their preferred payment method. For the first time, payments with card (including direct debits) has outstripped payment with cash, falling to just 48%. Added to this, the UK Cards Association have said that a key factor in this is the uptake in contactless card payments. Consumers are now able to spend up to £20 (soon rising to £30) simply by tapping their card on a compatible terminals.

Last year alone, £3.32 billion was spent via this method, showing the growing need for consumer convenience. If your business specialises in lower cost items, this could really be the time to consider implementing a platform able to receive contactless payments. With almost a third of consumers citing payment method as a vital part of their shopping experience, it is important to adhere to these needs to ensure that you are servicing your clients based on what they want. Alternatively, if you are able to track that the majority of your customers pay with cash, it’s probably not be the best business decision to implement this specific payment method. The point is, it’s all about understanding your customer.

Keeping on top of stock

Whilst both consumers and business owners alike agree that running out of an item of stock is likely to result in a no sale outcome, this is a mistake that can easily be rectified by embracing a platform that can manage stock, and alert the owner when products might be running low. By tracking when certain customers shop and by analysing their patterns, business owners can ensure that they are stocked up with the popular products when customers come into the store.

Even further than this, if you have a system that is able to log transactions on an ongoing basis, alerts can be set to notify the owner when they need to stock up. This means that you can not only satisfy your regular customers, but can impress new shoppers and create a reputable and reliable business.

Ultimately, that entrepreneurial instinct is always going to be important in managing an enterprise. Without that “feeling”, a potential business owner could be held back waiting for evidence that their business will work – chances are, this evidence will never be enough. However, once you’ve taken the leap, data can become the strategic key to success. Utilising customer information the right way can help cement customer relationships and grow your business from an idea or passion to a genuine success.