HOW DO YOU measure sales performance? Being a good team player, being customer-centric or even placing value on someone who simply doesn’t rock the boat are how some retailers might measure sales performance. While these might make for a harmonious environment, they don’t necessarily equate to driving revenue.
Measuring salesperson performance should start with each salesperson having a target. Their sales goal guides their behavior and performance.
Here are a few of the key performance indicators (KPIs) you should measure.
Total Sales: Obviously an important one — you need your salespeople to sell! You should be looking for them to meet or exceed their sales goals.
Average sale: This KPI can demonstrate your staff’s ability to close the bigger sales. While this is an overall average retail sale, you should review it per department. It is important to understand your sales talent. It’s very common to have certain salespeople who perform better in certain areas than others. You don’t want to see a salesperson who excels at selling diamond engagement rings stuck in the sterling silver section. That’s not deploying the best strategies for your business.
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Discount: This is a critical KPI to measure, specifically the variance among your team members. You should benchmark the frequency a discount is given, as well as the percentage given. Awareness is the first step to deploying a strong plan for your team to give away fewer discount dollars. A Gallup study showed that a customer who is fully engaged represents an average 23 percent premium in terms of share of wallet, profitability, revenue, relationship, etc. However, a disengaged customer represents a 13 percent discount in those same measures.
Quantity sold: Salespeople shouldn’t stop after their customer says they’ll take it. The customer is in buying mode, and this is the ideal time to suggest an add-on. Furthermore, the holiday season is the perfect time of the year to ask who else is on their list. It is good to review the variance in the quantity sold among your sales team as it will help you identify a potential time management challenge or conversion problem.
Conversion Rate: How many potential customers walk without purchasing? How many repair customers are converted to fine jewelry purchases? Do you track the number of bodies that come into your store? Research shows top performers close between 30-40 percent. By measuring this, you can identify those who need additional training.
Customer Information Capture Rate: Emails and texting are the two preferred forms of communication across all demographics, and email has one of the highest returns on investment.
Measure these key performance indicators at least weekly during your holiday season. This will allow you to ramp up training initiatives that will effect positive change throughout your season.
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