There’s an old management saying, attributed originally to Peter Drucker, that if you can measure it, you can manage it. And if you can manage it, you can improve it. And that’s what this episode of Real Retail TV is all about–

four retail sales statistics, and why they are important to your success. So if you follow sports at all, you know that how people measure success is by looking at numbers. They look at wins and losses. They look at individual statistics.

If you’re a baseball player, there are statistics like batting averages and strikeout percentages. If you’re a basketball player, you’re looking at things like offensive rebounds, defensive rebounds, defensive efficiency. All of these statistics, while not telling an entire truth, give insights into performance. And that’s what retail sales statistics do.

They give you insights into your team’s sales performance. And let’s just get clear–

the object of your business is to sell your goods. And the reason you have people on your floor is to sell your goods. Of course, you want to do it in a customer-focused, customer-friendly manner. Of course, you want to apply the six steps to the perfect purchase process so that your customers get that great experience.

But at the end of the day, it’s all about whether it’s working or not, and statistics give you great insights into who’s doing well, where. So let’s talk about the four statistics. The first statistic is average sale. And the average sale shows whether your sales people are comfortable selling higher-priced goods.

And it shows whether they are, indeed, adding on. So average sale, in my opinion, is one of the most important benchmarks of a successful sales person. If you had to focus on one statistic, I would recommend that’s what you focus on. What is the average sale of my store?

How can I improve it? What are the average sales of my individual sales people? And how can I improve them? The second key statistics is items per sale.

Some people call it units per transaction. I happen to call it items per sale. And items for sale measures whether someone is adding on. And again, this is a sales training issue.

Are they suggesting merchandise when they’re out on the floor showing that dress? Are they talking about the other things that people need? Are they adding on impulse items at the register? There is an enormous amount of money to be made by making sure your people are successfully and skillfully adding on.

And items for sale is the statistic that measures that. The third statistic is sales volume per hour. Now this is interesting, because a lot of people like to do that tasks. You know what I’m talking about.

They like to tidy up the stock room. They like to work on displays. They like to find things to do that aren’t associated with getting out on the floor and serving your customers. But let’s go back to a statement I made earlier.

The job of your salespeople, yes, is to keep your store looking good. Yes, it’s to do the operational tasks. But the real job is to turn the foot traffic you have into your store into cash in the till. So when you start to look at your statistics, when you look at sales volume per hour, you will start to see who is operationally focused, and who is sales driven.

And one of your challenges is to take those people who are operationally focused, and shift their thinking into giving your customers that great experience. So while everybody has to do work, and while I think sales volume per hour is not one of the most important statistics, I think it is important and bears watching. The fourth statistic is conversion. And conversion measures the percentage of people who come into your store and actually buy.

Now, for a lot of you, if you have a destination store, conversion is not that important. No, I shouldn’t say that. I was incorrect. It is important, but managing it and measuring it is not as important.

Because if you’re a destination store, the people who come into your store are probably going to buy. So your conversion number is naturally very high. And you might want to keep an eye on it, but you’re not going to want to focus on it like you focus on average sale or items for sale. But however, having said that, if you go to downtown Grand Haven, where in the summer, there are lots of tourists just walking around–

I call it casual traffic–

people killing time, people just window shopping, people just shopping–

if you have a store like that, conversion, measuring it, managing it, coaching to it, making it increase is critical. So I can tell you, as a retail guy and as a guy who loves to go into shops and see what’s happening, the world is filled with stores who have sales people who don’t even engage a customer. I don’t know if it’s happening–

I’m sure it’s not happening in your store. But have you ever been into, gone into a store, and somebody looks up from behind the counter, and says, “Hi, can I help you with something?” That is a sure-fire way to suppress your conversion. You need to train your people how to skillfully get from behind the counter, and greet a customer, and ask a key question that will get them into a conversation, that will allow them to proactively have that conversation, and ask good questions, and actually sell something.

So conversion, if you have a lot of casual foot traffic, is something you need to keep a really, really close eye on. Now, until the last few years, measuring conversion was almost impossible. You had to spend an enormous amount of money for a traffic counter. But now the price of traffic counters has gone way, way, way down.

And even the smallest independent retailer can afford a traffic counter. So you need to invest in that technology. But the information that you will get from that technology, the ability to manage, measure, and improve your conversion, makes that investment really, really worthwhile. So they are–

the four statistics that really, if you just pay attention to these four statistics, you will have a really, really good idea about what’s happening on your sales floor. You’ll see where improvements can be made. And you’ll really be able to increase your sales in a meaningful way by paying attention to the important things that are happening on your floor.