Are my customers switching to competitors?
When we see a decrease in the number of customers, we want to understand what those customers are doing: are they no longer buying the products, or are they switching to an alternative under pressure from promotions or price.
Case
The supplier notes that his sales are falling, this due to a lower number of customers buying the products. The supplier wants to better understand why there is a decline, are the customers switching to the competitor, or what is going on?
Where are my customers?
The most ideal analysis for this question is a Gain-Loss analysis (available on an ad hoc basis). However, you can also find a lot of information in the ‘Category Report’ (available in ‘Basic Pack’). We show you below how you can do that.
Analysis via Category Report
Our performance is clearly lower compared to last year. We see a strong price increase, which means our price level is on average higher than the direct competitors, where the price level remained stable.
Has this also led to a switch?
When we look at the ‘% HH bought’ we see a significant decrease. A part of the customers have dropped out. If we look at the competitors, we do not see an increase in the % of our customers who bought the product. The increase of sales of the competitors is due to higher purchases per trip.
Of course, it may be that customers took both your products and products from the competitor during 1 trip, and now only buy products from the competitor. We can analyze this in more depth via a Gain-Loss.
Origin tables: in the ‘Category Report’ (available in Basic and Advanced Pack), go to the ‘Brand and product group’ tab and click on ‘create your own segment’ in the top right corner. Click on the blue ‘unlock products’ button and select the products that resemble the product you want to analyze. You select category, brands or products, and click on ‘Apply’ at the bottom and then again on the blue button.
Analysis via Gain-loss
The Gain-loss confirms that few customers have switched to the competitor’s items. The customers who no longer buy your products also don't buy the competitor’s items. They no longer buy products of this subsegment.
Origin tables: Gain-loss analysis (Ad Hoc)
Conclusion
The turnover that was lost due to the price increase is due to customers who no longer buy this type of items, not because customers have switched to similar items from the competitors.