Do You Really Know How Effective Your Staff Is?

I’m always surprised at the number of retailers that don’t measure their store’s traffic. Without this vital statistic a retailer cannot measure the true effectiveness of their store staff.

While metrics like average daily sales (ADS) and units per transaction (UPT) do measure a staff's effectiveness with their buying customers, they don't assess how well employees maximize all of their customer opportunities.

One of my favorite metrics is dollar per person.  Dollar per person (DPP) is determined by dividing store sales by the number of people who entered the store.  If a store did $50,000 of sales with 4,000 people coming into the store, the DPP would be $12.50. So it shows the store got $12.50 in sales for every person who walked in the door. DPP is a terrific metric to use when comparing stores companywide. Transactions per person (TPP) is a also a good metric to compare multiple stores' effectiveness, especially if there is a wide variant in average sales throughout the chain.

One of the complaints I do hear from retailers who measure the DPP is the inaccuracy of the traffic counters. Of course you only hear these complaints when a store’s DPP numbers are down. I would agree that traffic counters aren’t 100% perfect, and yes, on slow days the UPS driver hurts your DPP number.   But in the long run the traffic counts are appropriate. As I like to say, as long as it’s historically inaccurate, then it’s accurate.

I would highly recommend that if you’re not currently measuring your store traffic that you begin to do so. Of course, after you start measuring traffic and tracking DPP and TPP any store that falls short will have to resort to the old standby excuse... the weather.