How to Track Your Offline Customers (Without Resorting to Coupon Codes)

Once you've got an online store, you might start thinking about expanding into bricks and mortar.

Maybe a booth at a trade show or one of those small-scale, temporary pop-up stores.

But how do you connect digital information to your physical business? And how do you reconnect with your in-person customers?

We spoke to the Retail Prophet Doug Stephens to find out. 

In this TGIM short, you'll...

  • Hear Costco and Amazon's strategy and how small business owners can mimic it.
  • Learn why coupon codes aren't always the best way to connect with customers.
  • Find out why it's so important to not get fixated on the numbers.

Check out the full short below:

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Speaker: For small retailers, a pop-up can be the perfect way to dip your toe into offline sales without breaking the bank, because they're small and temporary. Pop-ups let you meet customers out in the real world, build interest in your brand, and test new markets without a lot of overhead.

Doug: We, as a retail industry, can't simply build a store and expect that people are going to necessarily come to us. What we're recognizing is that retail, fundamentally, has to become tremendously more nimble, tremendously more flexible, and opportunistic, frankly. We need to go where people are, and we need to take our stores where it makes sense contextually.

Speaker: This is Doug Stephens. He's the founder of Retail Prophet, a consultancy that examines the future of retail and consumer behavior.

Doug: The pop-up, the advent of pop-up, and the idea that that store now can still be connected, it can be connected into a store infrastructure, even though it's just a temporary space. The ability to do that now is giving us this ability to take the store to the people.

Speaker: Doug told me that pop-ups can be a great opportunity for a small business. Especially if you sell physical goods like clothing, or art, which really benefit from that in-person experience, but Doug says, pop-ups present a unique challenge. How can you tell if any of the people you meet in the real world will turn into paying customers, or to put it another way, how do you know if the hours you spend on the weekend sitting behind a table are worth it? If you meet a customer at a pop-up and they end up buying from you online a month later, how do you track that?

Doug: This is one of the huge questions. How do you measure attribution across channels? It's a conundrum, for sure.

Speaker: Doug told me there's some fairly typical ways to track customers from the offline world to online.

Doug: What we typically jump to is a coupon of some kind. We want some kind of trackable mechanism. Here's a card, it will save you 10%, just go to our website and enter the code. That's fine. In a very rudimentary way, that's fine. What will you prove? You will prove that someone was there and the effort you put into speaking to that person brought them to your website. You will prove that correlation, and that's fantastic.

Speaker: Discount codes, or special URLs, or custom landing pages, these are all related techniques, and they're relatively easy to implement. If you listen to a lot of podcasts, they might sound familiar. But, Doug says it's important to be careful about what a coupon code says about you and your brand.

Doug: Because here we're talking about the first introduction that you make with a consumer, arguably if you're at a pop-up, you've never seen this customer before. It's their first introduction to your brand and to what you sell. Your first move to bring them into your community is to bribe them, in essence. I've just immediately cheapened that whole experience, right? I think we have to be very careful of that.

Speaker: Doug told me that while coupon codes and custom URLs can help you track customers in a rudimentary way, they're really just a knee jerk reaction to this challenge of tracking customers across channels. Instead, Doug has another suggestion, one that he says is a lot more work, but has the potential to be much more effective.

Doug: What are the big guys doing? If we look at brands like Costco and Amazon, what they have managed to do is they've managed to create an ecosystem that people want to be a part of. By virtue of that, they're not looking for a coupon, they're actually willing to pay a membership. Amazon charges $99 a year for Prime. Costco charges somewhat more than that for a Costco membership, and people are willingly paying these membership fees because there's something, there's some perceived value there that is so great they want to be a part of it.

I think small retailers can look at that and they can distill that down. Are you going to start a membership program the scale of what Costco has? Of course you're not. But, are you able to package up an experience for a consumer that sounds so awesome and so compelling that they're literally willing to hand you that information. They're willing to go to your website and tell you who they are. That's what retailers need to think about.

Speaker: What might that look like if you're not as large as Amazon or Costco?

Doug: We might have exclusive collections for people that come to our site and share who they are and become members of our community. Maybe we customize, maybe we personalize for people that are members of our community. Maybe we have exclusive customer events. That engagement with a consumer at your pop-up shop is also an opportunity to start a very long and rich relationship with that customer. They will only do that if there's high perceived value about being part of what you're doing.

Speaker: If you're used to the world of e-commerce where almost everything is trackable and quantifiable and shows up on a dashboard, the offline world can seem messy or even frustrating, especially when you try to track customers between channels. Whether you use coupon codes, custom URLs, or build a full on membership system, it can be hard to measure every aspect of your business.

Doug: I mean there's a difference between being data driven and data informed. If you have the availability of great data, that's fantastic. However, I would also argue that you will also run the risk if you become so myopically obsessed with data, you run the risk of making some really awful decisions about your business, too. I think that the best business people are those who are data informed as opposed to those who are data driven. Again, no. You're not going to be able to track everyone across every channel. Consumers share data. They share loyalty cards. They share coupons. The coupon you gave to one person on a Sunday afternoon could be used by their great aunt a week later. You don't know. Hence, I think, all the more reason to try to develop a proposition that is stickier, that is deeper, that is more 3 dimensional in nature, and more transformational, rather than transactional, but it's about the architecture of the experience. It's not about the tool you use to measure it.

Speaker: Doug Stephens is the founder of Retail Prophet, a consultancy that examines the future of retail and consumer behavior.

About TGIM: TGIM is a podcast for people who can’t wait for the week to start. In each episode we’ll be bringing you inspirational stories about entrepreneurs who have overcome obstacles, built incredible businesses, and are now living the life they want.