Keep a close eye on these critical indicators to steer your store to success
I’m often asked by jewelers what key performance indicators should they monitor most closely. The answer depends on what timeframe you are looking at. Here are my suggestions for a daily focus for a store manager.
1. Total Sales versus Budget. This may seem obvious, but it’s surprising how often business owners don’t really know how they are tracking until the end of the month … and by then it’s too late. The first issue for many store owners is, “Do you have a budget?” Unfortunately, many don’t, or if they do, it is a tool they create to keep their financial adviser happy and never refer to again. Tracking sales performance against budget on a daily basis gives you the chance to take action if objectives aren’t being met.
2. Door Count. Some may wonder why I take notice of this and why I’ve given it the No. 2 spot for priority. The fact is your foot traffic count gives you huge feedback on where your business is heading. If your sales are down, is that due to a lack of customers or not being able to sell to them? Without knowing your door count, you don’t have an answer. Without a door count, many store owners don’t record their foot traffic and therefore can’t identify whether they need to be driving traffic or doing more with the traffic they already have. If you are interested in how many people visit your website, then you also need to know how many visit your store.
3. Reorders. This is a very close No. 3. Promptly reordering items that are good sellers is one of the easiest ways to grow your business. Unfortunately, many either don’t do it or leave it too long until they do. A fast seller reordered immediately can increase your stock turn for that item. The more available it is, the more sales you will make.
4. Average Sale. You should have objectives for your business in terms of average sale. Increasing this figure is one of the easier ways to grow your sales. Measuring each day’s average sale achieved against your target will show where you need to improve. The significance of this will depend on whether you are a high-volume low-average sale store or one who has a high average retail but few items transacted daily.
5. Margin Achieved. There is no point making sales if they are not profitable. Checking your daily margin can reveal problems immediately. It’s not difficult to pinpoint low margin sales and discover the reasons when checking daily. Ask a staff member a month later why a particular item was sold at that price and they will look at you blankly; ask the next day and you will have your answer.
This article originally appeared in the June 2017 edition of INSTORE.