Step 5: Know The Numbers In Your Business - Pt 2

Sales

Do you pay commission on sales made by your salespeople? Do you let them offer discounts? How does discounting affect the commissions you pay? Do you offer no incentive in a financial sense to employees? Is this costing you sales revenue through attracting poor sales people? Do you train your employees in product knowledge? Are employees trained in sales skills? Do they follow the set protocols when selling to customers, as regards greeting the customer and following a process to ensure the customer needs are fully explored and met? Do you have a written protocol for the sales team to follow?

Discounting is a good way to lose any profit from an item sold. The amount of money that you reduce the price to provide that discount comes out of the profit to the business. If discounting is not attracting sales of additional non-discounted stock, then you might wonder: “How is this adding value to my business?”

Many retailers set up shop and wait for the customers to come in. Yet they neglect to count the traffic that comes in and so they have no way – no way at all – to measure the conversion rates of shoppers to sales. Without that data, there is no way to tell when the conversion for sales per shopper go down, or improves. That means they have no qualitative way to know for sure, what is working, to generate more sales, or if something in the process is costing the business in the form of sales not made.

Add to this, many neglect to gather contact detail that allows the business to market to customers effectively. If your customer information is not captured on a customer client management system, you cannot communicate with them effectively. Neither will you be able to assess their value to your business, over time. This ‘Lifetime Value’ is something you and the business… need to know!

You (and your business), need this data to effectively target the money spent on marketing and advertising. It is the foundation for assessing whether to spend, or not spend in particular ways.

If you want your sales team to be accountable, you need to set the rules and give them the training they need to do the best job they can. Gathering this information is as important as presenting products well. And you need the information metrics that make measuring their performance - and yours - possible.