|5 ways to move the sales needle|
|Written by Kirk David Blank|
|Wednesday, 05 August 2015 12:40 PM America/New_York|
How to get your store’s ‘guests’ to become ‘customers’
One of the most common problems a store owner can have is the failure to spend enough time evaluating and observing customer behavior on the sales floor. Assuming suggestions I’ve made in past issues have sparked some ideas for driving traffic, you should be seeing more customers. But how do you actually get the sales needle, not just customer flow, moving in a positive direction?
There are three ways to move the sales needle. You can drive sales in your stores by encouraging more guests to visit, boosting your average ticket and increasing your conversion rate, that is, to sell to more of the guests already visiting the store. For the purposes of this column, we’ll call these visitors “guests” since they don’t actually make a purchase. When they purchase something, they become “customers.”
To a great extent, retail sales has been a two-trick pony—drive more traffic and increase the average ticket. Getting more guests into your store usually requires an advertising or promotional investment, such as the catalogs, postcards and email marketing that the Munce Group provides for independent stores. Most retailers focus on increasing the average ticket, but what about selling to guests who are already at your store? Driving the conversion rate is another source of sales often overlooked.
Before considering how to drive conversion, know that it is first important to actually track traffic and then calculate the rate of conversion in your stores. Many retailers confuse tracking guest traffic with doing transaction counts, but those two functions are not the same. Transaction counts represent the number of people who made a purchase; while traffic counts represent the total number of people who came to the store, buyers and non-buyers.
Then, conversion rate is calculated by dividing sales transactions by gross traffic counts. For example, if you logged 500 traffic counts in your store and there were 200 sales transactions for the day, your conversion rate would be 40 percent (200 divided by 500).
If you don’t track traffic, you can’t calculate conversion rate. If you can’t calculate conversion rate, you can’t improve it.
Here are five ways you can improve conversion rates:
Every day, guests visit your store with the intent to buy, but leave without making a purchase. Capturing even a few more of these lost sales can have a significant impact on sales. If you don’t track traffic or measure conversion rate in your stores today, you are missing out on an entirely new way to drive sales. Retailers who are focused on driving conversion rate have a significant advantage over those who do not.
Kirk David Blank is president of Largo, Florida-based Munce Group, an association of 400 independent Christian retail stores, and publisher of More to Life (mtlmagazine.com).