The Importance Of Effective Evaluation Of Key Performance Indicators
The Importance Of Effective Evaluation Of Key Performance Indicators
Stick with me here for minute its not hard math.
There are five retail KPI's worth tracking at the individual Salesperson level: Sales per hour; items per sale; average sale; conversion rate; wage to sales ratio.
If you add them all up (individually) and divide by the number of staff you get the store average' of each KPI.
You can now compare each Salesperson's five KPI's to the store average KPI' instantly revealing the MOST deficient statistic or undersupplied KPI for each individual Salesperson.
Why is it important?
Well you are now able to say with perfect clarity that:
HAD (employee's) average sale of say $69 been at the store average of $114, (employee) would have sold $2803.
HAD (employee's) "Items per sale" of 1.68 been at the store average of 3.02 (employee) would have sold $3471.
HAD (employee's) "Sales per hour" of $129 been at the store average of $169, (employee) would have sold $1355.
And so on
Thus, $3471 is the greatest sales increase (employee) could have achieved - the deficient statistic - or undersupplied KPI - being Items per sale.
This deduction gives us great insight into what behavior to coach first. In this case it's items per sale' and the associated behavior correction is either a) (employee) is not adding on, or b) (employee) does not have enough product knowledge to sell companion products. The point is that managers who want to help their Salespeople perform better now know exactly which area of expertise to focus on to achieve the maximum possible performance improvement result.
In the case of sales per hour' (employee) may be slow at attending customers or taking to long with others. For average sale' (employee) probably doesn't have enough product knowledge or does not know how to sell more expensive items.
By first looking at the deficient KPI, and then sorting through memorable observations about (employee's) behaviors during the week, managers can quickly home in on corrective behavior, in its most appropriate or truthful form.
If you track these statistics each week at the individual staff level which implies comparing each Salesperson to the store average you would increase each Salesperson's chances of succeeding within their own specific area of need and thereby create an opportunity to increase individual sales by as much as thirty percent.