Dear Steven,
We're doing everything right, but our sales are still down from last year. We've tried discounts, we've tried extra training, and we've even increased advertising. What else can we do?
Signed: Frustrated store manager.
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Dear Frustrated,
There are so many places to start fixing your problem, but you probably don't know where to start. I'd start at the beginning; the beginning of your sales process.
One of the most underused statistics in business is the most important. I'll ask you a question and then answer it as if you replied 'No'.
Question: Do you know how many people walk in your store every day?
If the answer if No, let me explain why you should count.
Why you should count.
It's the only way to see if the problem is in store, or getting people to the store.
If your foot traffic is the steady, the problem is inside the store and you need to go one step further by measuring conversion rates. Are they entering and simply not buying? (eg boring overpriced stock?).
If traffic counts have dropped, the problem is outside the store. The problem could by truly economic, but it could be other factores. It could mean you need more local morketing or some new competitive force has developed. It could be something as simple (and complex) as a changed bus line or signage.
By measuring foot traffic, now you know where to focus your attention.
A previous blog post "How to double your revenue in three years" used customer counts as a critical input number. You might want to read it later.
What you should count
Count people - obviously. But see if you can get deeper and count Males and Females, and/or Young V Old. Again it narrows your problem.
If possible, also decide whether to count groups of people or individuals. For example, does a family of 5 people shop in store a one person (eg mum buying female clothing), or do they shop individually? (e.g. fast food chain).
How often you should count
In this case, less is less.
The more you can measure, the more you can use the data. Here are some options:
- Count a sample for a single day and count for the same day the next week or month.
- Count a sample of people entering the store over the same 4 hour period (peak) ever day of the week for one week, and the same week the next month/quarter.
- Count every person entering the store every day.
How you should count
You can start old-school or get technological. Here are some options.
- Sit someone in a corner of the store and have them do nothing else but simply count people (no distractions).
- Buy a cheap infra-red people counter to go at the door. Most stores use them to alert staff when someone is entering, but not to count customers.
- Get fully electronic and install a video counter. It's the most automated and accurate method which can also provide full reporting with trends. Ask me if you want to find out more.
So leave the scatter gun in the cupboard, and get focused on the beginning of the process.
Steven Di Pietro
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