How does your store make money?
One of the most common mistakes small retailers make is failing to properly analyze sales revenue.
One of the most common mistakes I see with small retailers is the failure to analyze sales revenue. They may know top line sales and bottom line profits, but don’t take the time to understand the exact composition of sales. Are you selling to new or existing customers? Do you sell more of item A or Item Z or items A and Z together? What is the average sale or sale per employee?
Ask the typical small store owner if they track Key Performance Indicators (KPI’s-see list below) and they answer, “It’s all in my head.” With this tracking method, they’re probably missing out on some extremely important -and easy- ways to increase revenue.
KPI’s provide POWERFUL insight that can help determine targeted marketing solutions, pricing strategies, hiring needs, new revenue opportunities and a host of other strategies that can result in increased revenue and decreased expenses.
KPI’s are easy to track with point of sale software by simply inputting correct and detailed information for each customer and learning to pull the appropriate reports daily, weekly and monthly. I find many retailers don’t take the time to learn the capabilities of these systems. For those retailers that don’t have a POS system, I recommend tracking sales manually to get a grasp on the when/what of sales. It takes some effort but can pay off big in the long run.
How can KPI’s help grow business? Here are just a few examples:
Average Sale/Sale by Category
I worked with a coffee shop that needed to increase revenues by 10 percent which represented an increase in sales of about $2000 per month. She was going to invest $6000 in advertising to increase traffic to achieve her revenue goal. By knowing her average sale, which was $3.95, we were able to bundle two items as a special at $ 4.75. Just by upselling her regular customers, she was able to increase revenues without spending a dime or giving up any profitability.
Sales by Day of Week/Daypart
By knowing when you are selling (or not selling) you can create a strategy to improve business during peak and non-peak times. For example, a pizza restaurant offered a daily lunch discount each weekday Upon analyzing his day/daypart numbers, we found that Thursday and Friday lunches were triple the volume of Monday through Wednesday. Since business was so good later inthe week, there was no need to continue offering a discount on those days. The owner was able to increase profits during the peak sales days and offer steeper discounts to lure customers during the off days.
New vs. existing clients
A beauty salon client did not track new vs. existing clients or client retention. Once they analyzed their numbers, it was clear they were getting plenty of new clients; they just weren’t retaining them. By understanding that, they were able to implement a two-fold strategy that included customer service training for the stylists to insure greater customer satisfaction- and ultimately their return -as well as a new customer welcome program that offered new clients discounts for pre-booking their next appointment.
Customer profile/demos
Take the simplest customer demo – the zip code. I recently worked with a franchisee for whom the franchisor did a quarterly mailing. In comparing the zip codes of the mailing to the actual client zip codes, we saw that the franchisor mailing list did not match the current client base. Armed with this information, the client was able to inform the franchisor so they could create a more geographically accurate mailing list and thus, better results from the marketing dollars spent.
These are just a few examples of how understanding the nuances of revenue can help a small business owner create better – and sometimes very easy – strategies to grow business.
Key Performance Indicators
While not all are applicable to each business, here’s a list:
Sales per employee
New clients per week vs. repeat clients
Sales per square foot
Average check
Sales by category
Merchandise vs. service
Lead sources
Sales by day of week/day part
Sales conversion rates
Customer profile
Which work for you? Start tracking them today. Learning how you make your money is the first step to making more!
Until next time remember,
You can do this!
Angel
Overwhelmed with social media? Just remember the 4 B's and you'll be on your way to creating effective postings and engaged followers.
The four B’s of Social Media
Be Authentic
Let your personality shine on social media. If you’re quick witted or clever, caring and nurturing, a born teacher or a social activist, use that personality to engage your social media audience.
Be Present
Post on a consistent schedule. You can’t be in one day and out the next. Your fans and followers need to know you’re as committed to the platform as they are. You also need to be responsive. Thank new followers. Ask them questions. Reward their dedication.
Be Prepared: The Potential Backlash
People are free to post whatever they like. Usually it’s a question, a comment or a compliment. Sometimes, it’s not so nice. A disgruntled customer can really set your universe on its ear – even if the negative comments are unfounded. Understand that at some point, this is going to happen to you and it won’t be fun.
Have a policy prepared as to how you are going to handle this type of disruption. Address the problem quickly – and publicly – online. If the customer still isn’t satisfied, try to take the conversation off line via private messaging, phone or email. The objective isn’t to be right; it’s to let your followers know you’re aware of the issue. If the vitriol spreads and encourages multiple negative comments, you need to examine the legitimacy of the problem, resolve it on your end and make a public announcement as to how you solved it. Act quickly and decisively.
Be Creative
Consider your social media posting as entertainment, it’s not all about selling. Delight your fans and followers with interesting posts and photos that make them think, make them feel good, make them laugh or teach them something new. Solicit their opinion. By doing this, you make them appreciate your brand even more.
Until next time remember,
You can do this!
How does your store make money?
One of the most common mistakes I see with small retailers is the failure to analyze sales revenue. They may know top line sales and bottom line profits, but don’t take the time to understand the exact composition of sales. Learn how tracking Key Performance Indicators can help you find extremely important -and easy- ways to increase revenue.
One of the most common mistakes I see with small retailers is the failure to analyze sales revenue. They may know top line sales and bottom line profits, but don’t take the time to understand the exact composition of sales. Are you selling to new or existing customers? Do you sell more of item A or Item Z or items A and Z together? What is the average sale or sale per employee?
Ask the typical small store owner if they track Key Performance Indicators (KPI’s-see list below) and they answer, “It’s all in my head.” With this tracking method, they’re probably missing out on some extremely important -and easy- ways to increase revenue.
KPI’s provide POWERFUL insight that can help determine targeted marketing solutions, pricing strategies, hiring needs, new revenue opportunities and a host of other strategies that can result in increased revenue and decreased expenses.
KPI’s are easy to track with point of sale software by simply inputting correct and detailed information for each customer and learning to pull the appropriate reports daily, weekly and monthly. I find many retailers don’t take the time to learn the capabilities of these systems. For those retailers that don’t have a POS system, I recommend tracking sales manually to get a grasp on the when/what of sales. It takes some effort but can pay off big in the long run.
How can KPI’s help grow business? Here are just a few examples:
Average Sale/Sale by Category
I worked with a coffee shop that needed to increase revenues by 10 percent which represented an increase in sales of about $2000 per month. She was going to invest $6000 in advertising to increase traffic to achieve her revenue goal. By knowing her average sale, which was $3.95, we were able to bundle two items as a special at $ 4.75. Just by upselling her regular customers, she was able to increase revenues without spending a dime or giving up any profitability.
Sales by Day of Week/Daypart
By knowing when you are selling (or not selling) you can create a strategy to improve business during peak and non-peak times. For example, a pizza restaurant offered a daily lunch discount each weekday Upon analyzing his day/daypart numbers, we found that Thursday and Friday lunches were triple the volume of Monday through Wednesday. Since business was so good later inthe week, there was no need to continue offering a discount on those days. The owner was able to increase profits during the peak sales days and offer steeper discounts to lure customers during the off days.
New vs. existing clients
A beauty salon client did not track new vs. existing clients or client retention. Once they analyzed their numbers, it was clear they were getting plenty of new clients; they just weren’t retaining them. By understanding that, they were able to implement a two-fold strategy that included customer service training for the stylists to insure greater customer satisfaction- and ultimately their return -as well as a new customer welcome program that offered new clients discounts for pre-booking their next appointment.
Customer profile/demos
Take the simplest customer demo – the zip code. I recently worked with a franchisee for whom the franchisor did a quarterly mailing. In comparing the zip codes of the mailing to the actual client zip codes, we saw that the franchisor mailing list did not match the current client base. Armed with this information, the client was able to inform the franchisor so they could create a more geographically accurate mailing list and thus, better results from the marketing dollars spent.
These are just a few examples of how understanding the nuances of revenue can help a small business owner create better – and sometimes very easy – strategies to grow business.
Key Performance Indicators
While not all are applicable to each business, here’s a list:
Sales per employee
New clients per week vs. repeat clients
Sales per square foot
Average check
Sales by category
Merchandise vs. service
Lead sources
Sales by day of week/day part
Sales conversion rates
Customer profile
Which work for you? Start tracking them today. Learning how you make your money is the first step to making more!
Until next time remember,
You can do this!
Angel
How to Increase Gift Card Sales During the Holiday Season
Four proven tips to accelerate your gift card sales this holiday season
Gift cards have been the most popular gift for the past 5 years. That’s a pretty great reason to put a plan in place to accelerate your gift card sales this holiday season, no matter what type of business you own!
7 Compelling Facts About Gift Card Sales:
Need more reasons why gift cards are a great way to boost holiday sales? Here are seven compelling facts that will help convince you.
- Gift cards sales were projected to increase by 6% in 2016 and will account for over 18% of holiday sales!
- Two-thirds of consumers have purchased at least one gift card.
- Retailers who switch from paper to plastic cards typically see a 50-100% increase in sales.
- The average amount loaded on a digital gift card is 10-15% more than a plastic gift card.
- 61% of gift card holders spend more than the amount of their gift card and 75% of those who overspend spend 60% more than the value of their card.
- Gift cards are most popular with teenagers.
- 40% of gift card recipients do not use the total value of the card.
As you can see, gift cards can significantly increase your bottom line in December and beyond so their promotion and sale are well worth your attention.
4 Tips for Boosting Gift Card Sales
Here are a few tips for selling more cards:
Start with plenty of in-store promotion.
- Signage - interior, window and sandwich boards
- Flyers with purchase
- Train employees to ask for the sale. For example, "Would you like to purchase a gift card for a friend or family member?"
Create incentives for gift card purchase.
For example, customers can get a $20 gift certificate for themselves with the purchase of a $100 card.
Hint: If your average sale is about $150, then the incentive should be given on gift card sale of $200 – increasing your average sale!
Capture the late shoppers.
More than one in every four digital or online cards sold in December are sold between December 21st and 24th. Email daily during week before Christmas.
Make it easy to purchase.
Even if you don't sell online, create a link to pay for gift cards through a Paypal account to use in your email and on your website and social media.
Set a goal for gift card sales this holiday season and create a strategy to achieve it.
Gift cards can not only help you make this a more profitable holiday, they can give you momentum going into the new year!
My book, Growing Small, provides even more ideas and tips for achieving retail success in 90 days with limited time and resources. Download two free chapters to get a sneak peek inside!
One easy way to get your staff in the spirit to sell more this holiday season
Looking for ways to get your staff pumped this holiday season? I know one surefire way to light a fire under them….and that’s to pay them!
Even if money is tight, there are ways to incentivize staff for selling more without being a drain on cashflow or margins.
Even if you don’t ordinarily have a bonus program, there’s no reason not to implement
one just for the holiday season.
Most retailers earn 20-30 percent of their annual revenue during the holidays. This is the time of year you want to maximize every single sales opportunity! And incentives are a great way to motivate staff.
Here are some DO’S and DONT’S for setting up a successful bonus program.
DO
Understand what motivates your staff. What makes them drool? Depending on their age and tenure, it might be time off or perks like merchandise or gift certificates. It doesn’t always have to be money.
DON’T
Just offer a blanket reward on all items sold. A bonus program needs to work on both sides. That means your employees get incentivized for meeting their goals – and yours!
Let’s say for example, last year's holiday sales were $100,000 and your goal is to increase that number by 20 percent this year to $120k. Your staff incentives should be based on achieving or exceeding this year’s goal. That way any additional commission or bonus you’re awarding is coming out of new revenue.
DO
Consider segmenting
Let’s say you’d like to grow sales for a new line or service. Perhaps you’d like to increase average sale. You can create a bonus program around any specific segment of business you’d like!
DO
Tier the bonus structure. Add even more delicious opportunity for your staff after they’ve hit the goal. Using the example above with a goal of $120k, add an additional incentive if you reach $130k. In sales, we call that a BHAG (Big hairy Audacious Goal.) You’d be amazed at the enthusiasm you can generate around a big, fat opportunity.
DO
Train. Train. Train.
Just implementing a program isn’t enough. You need to host regular training to help your staff achieve their goals.
DON’T
Be afraid to instill a little competition among your staff. Most owners I work with are afraid that competition is divisive but it can create a ton of energy and ultimately, great results!
DO
Make sure your goals are reasonable and achievable. Goals should be a stretch but not so stratospheric that they can’t possibly be met. Shooting too high will only discourage your staff.
Good luck in putting together your bonus program! If you have any questions, email me at success@angelcicerone.com
Until next time remember,
You can do this!
Angel