Changing behaviors to gain business insights

By Stella

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(The way we spend our afternoons)

In these two weeks, we have meetings with Norma on a regular basis to go through the analysis of Norma’s shop and the implementation of solutions. Based on our analysis, we have made improvements on marketing and accounting system and designed a banner for the shop.

Norma and Leny (Norma’s sister-in-law and also the only employee of the shop) are both used to write down each item’s name and the selling price once they make a sale. Thanks to that, we are able to take the reference to their past records. However, items are written down in Filipino and sometimes they use abbreviations or brand names to note down the items they sold. Luckily Leny is always very patient and sits aside me so that I can ask for translation when I see new Filipino word. It took us several afternoons to organize last month’s records, which has proved to give us insights on marketing. In the process, I also realized they were not very consistent with record keeping. For example, for slippers sold, they would write down the word slipper or various brands of it. Sometimes when customers made a large purchase, they simply used the word assorted and wrote a lump-sum amount next to it. They also combined personal expense in the same book and did not attempt to make an effort to calculate how much revenue and expense are.

To deal with the problems we identified, the business and personal expenses are now separated and recorded in two notebooks. The accounting template we made for them is simple and easy and is comprised of two major parts – revenue and expense. For the revenue part, it is organized based on categories, such as T-shirt, shorts, bags, slippers, etc. We thought of this representation because through discussion with Norma we found she is interested in how many sales she makes for various kinds of items in different seasons. For the expense part, it is now streamlined to include business expense only. In the past Norma included her personal expense, like food and home electric bill, making the record difficult to interpret. Now she is able to know how much she has earned for each week with a glimpse. She likes the format as it is easy for her to calculate the profit by subtracting expense from revenue. She is able to depend on the book to check her sales in individual categories so that when she goes to suppliers she is able to know exactly the amount of supplies she should get.

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(Organizing and categorizing the past records)

In the process of checking Norma’s past records and figuring out the exact revenue and expense she made, we are able to derive important information which has led us to take a further step: marketing. We proposed product bundling according to two major factors: customer segment and past sales figures. We aim to boost selling by bundling products that have a positive synergy together. With thorough discussion with Norma, we finally agreed on 6 sets of items with 10% discount given. Some of the sets are promoted because of low sales figures. People might not even notice such products are available in Norma’s shop. On the other hand, the other sets are there to target the three customer segments, which are recognized and defined in part one of the report. We also reached the printing shop to ask for the price and sizes available and Norma is willing to pay the printing fee (350 pesos). In the process of banner design, we think of different ways of presentation and reached the consensus on a clear layout, readable fonts, and the use of icons to visualize the items in different sets. We were always working outside Norma’s shop so as to obtain immediate feedback from her.

Version 2
(Banner design for Norma’s shop)

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(Observing how Leny serves the customer)

From drafting record keeping template to banner design, we have stayed and worked outside Norma’s shop, so every time we visit them, we stay the whole afternoon there. Not only have we observed how Norma and Leny interact with customers, but we have also shared personal stories and developed great relationships with both of them. They treat us as if we were their daughters. Norma always buys us coffee and chocolate whenever we visit her, while Leny offers us bananas. One day I followed Norma to see where she gets the coffee because I wanted to buy for her in return. I wish I had bought a gift from Hong Kong for them! Norma and Leny also invited us to visit their house and have a dinner this coming Friday as they know we are going to leave on Sunday. We are looking forward to Friday and have been planning on what we can bring to them as a small token. I would say the experience working closely with Norma and Leny is very enjoyable and rewarding. Thanks to Norma’s openness to new solutions, we are able to go directly into implementations and check how they are executing them. These could not have been done if she was reluctant to make any changes.

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(A photo and a thank-you card for Norma)

Despite the fact that Norma has run the business for four years, she has been relying on intuitive sense to manage the business, from record keeping practice to stock buying. By encouraging her to adopt new record keeping template, and to promote her package offerings by putting up a banner in the shop, she is consistently stepping out of her comfort zone where nothing ever could grow there. Having been by her side while she is in the progress of changing behaviors, I appreciate very much her willingness and adaptability in trying new things, which hopefully can be turned into business results.

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(Introducing the new accounting template to Norma)

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(Choco / Coffee offered by Norma)

 

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