We have all heard about the importance of measuring performance. After all every professional sport lists it leaders by ranking of an average, points made, and percentage of success. Imagine for a moment if these performance statistics were not kept? The real leaders of the sport would become anonymous, team strategies would be scrambled and worse, the fans would lose the ability to identify with the true heroes of the game. As for the players, how can they improve if they don’t know what they must improve upon?
You may already have your own scorecard which shows sales by employee, by a product category, or by day of the week, but if these figures are not properly fitted in a KPI, they could be misleading you. For example, your top 3 sales people may also be working the hours when the most store traffic is occurring. Or your top selling category (by volume) may also be your most heavily discounted category, or worse, could be your highest in volume of returns.
There are 3 steps in setting up the measuring process:
- Create a Key Performance Indicator which contains relative sets of data
- Store sales need to be paired with store traffic.
- Store traffic vs. number of transactions will provide conversion ratios.
- Sales vs. Returns will give an insight on your product or indicate a serious problem with theft activity.
- Act upon the Key Performance Indicator
- Decide upon an action which will improve the performance indicator you have been measuring.
- You may want to employ a strategy to increase your transaction conversions with the hope these will become repeat customers for months to come.
- Review and refine the Key Performance Indicator
Once the KPIs have been developed, now comes the part of implementing this with your team.
- Focus on improvement, not blame. Gather insights from your team, identify causes.
- Measure things that matter.
- Show The Impact - Empower the Team with information on their performance so they will be motivated to improve and perform at a higher level.
The Result: You will have a solid method which will continually drive performance while building a positive team culture.
Ideally, have a system which automatically alerts the person responsible for a breached KPI. This will help keep all team members on track and fully engaged to their personal goals.
Even better: Have the alert linked to a video clip allowing all parties to see what the data is saying.
With the high level of customization, you will be able to attack any new problem as it emerges. (For example: Identify a new sales associate entering too many sales voids, or capture irregular patterns of returned merchandise.) While past performance is not a great predictor of future performance, the measurement of performance allows all to know who and what is leading the way, and who and what could use some improvement.
As one may imagine there is a sizeable amount of effort in collecting and analyzing the data which occurs hourly. Eyeson Digital, with its partnership with PawnMaster, has created an automated dashboard where KPI's may be viewed.
A few of the KPIs that save money and time:
- Hours Staff Underutilized vs. Hours Staff Overwhelmed
- Store Traffic / Number of transactions
- Store Traffic /Redemptions
By having these real-time insights, store owners can maximize their scheduling, deploy the right person to the days he/she will be best utilized and see how their marketing and customer acquisition programs are performing.