The only way you can improve your retail - marketing business

Allow me to propose a logical argument first:

Retailing is the PROCESS of offering a product or service to satisfy a (potential) demand.

This process requires certain knowledge and skills.

Assuming there is a market for your product, there are only two ways of getting better (making more money) at retail:

1. You can change the processes/activities that constitute the process = sell different products or change price points etc. (Manage the retail mix.)

2. You get better at this process by acquiring the relevant skills = get better at selling the same products at the same price points.

This is as basic as ABC.

A. The Process.

The ‘funnel’ has been done to death, but it conceptually holds true.



You must (1) attract potential customers, and then (2) convert them into buyers and finally (3) retain them.

Retail couldn’t be any simpler.

You put in place the strategies and the activities that will create a customer flow through this (virtuous) funnel.

It therefore makes sense to measure what you are doing, how well you are doing it and possibly even how that compares with the industry standard.


B. The Metrics

Each of the metrics below relate to one of the three stages of the funnel.

1. Awareness (Attraction metric)

I am not a big fan of reach and frequency type measurements since they merely measure potential. Actual brand awareness measurements are more useful. And for a smaller business it can be as simple as asking your customers some basic questions.

2. Head/feet count - (Conversion metric)

A simple measure of counting the feet or the heads or ‘visits’ in some form is vital because this simple piece of data makes for rich information.  All the measures that follow are based on getting an accurate number here. Get this wrong and you will never really know how productive your staff are, or how (in)efficient your sales processes are or how effective any retail operational changes are.

3. Capture Rate (Conversion metric)

This is often a bit more difficult to do (% of passing traffic you capture) but if you are in a shopping centre, you may be able to get reasonably reliable estimates from centre management on feet counts through certain doors/ down certain malls.

4. (Shopping)Trip Duration (Conversion metric)

One of the most reliable indicators of eventual basket size is the time a ‘browser’ spends in your store. (One specific study By MIT in a specific store revealed that every 1% extension of the shopping trip increased the average sale by 1.3%.This means an extra 2 minutes of shopping can increase sales by 13% if the average duration was 20 minutes.) But then again, the service is usually such that people don’t want to hang around…

5. Conversion Rate (Conversion metric)

This is the ‘crunch’ metric: % of store traffic that purchased. Everything that you do, everything you have done in your supply chain, in your marketing and in your store culminates in this number. Unbelievably, too few retailers measure this consistently and accurately.

6. Average Sale (Conversion metric)

Most independents focus excessively on the sales/ revenue for the day/week or month. I would argue that it is almost irrelevant. Certainly as a staff engagement tool, the idea of sales targets in a retail store based on total sales is a complete waste of time. Sales people know (if you don’t) that they have very little influence over the total sales. But some measure of an average sale/ basket is measurable even if only one customer entered the store.

7. Equity (Retention metric)

Finally you want to measure in some way the loyalty or value of your customers. This may range from the more esoteric ‘brand equity’ measures, to a simple number of ‘likes’ on your Facebook page or subscribers to your newsletter. You may gather by now that I would favour something like a repeat purchase rate or the number of visits per week/year etc.

From this list you will note that I elaborated on the conversion metrics more than attraction/retention metrics. This is because the latter are easy to understand and relatively easy to execute.

Conversion metrics, however, are where I believe we can really make a difference, and it happens to be the one which I don’t see often enough.

C: The Skills

The required skills set can be grouped into the three stages of the process too.

1. Communications

As a retailer you need communication skills to create awareness, interest and desire in your product. This can be anything from advertising effectiveness to learning how to tweet. We are currently assisting a retailer (one store, an online presence and a direct importing business) to resolve their brand architecture. As small as they are now, they are already finding it difficult to justify the costs of going through this exercise and losing brand equity in one of those businesses. Even if you don’t think of yourself as a brand – you ARE a brand and your customers think of you in a certain way. This requires strategies and resources and skills to excute.

2. In-store Experience

Note that whilst you may recognise the skills-sets listed below as ‘funnelling’ the customer towards the eventual sale, it is not a sales process. It is a structured way to deliver the experience – that translates into a (mutually beneficial) transaction – more often than not.

The four key skills here are:


  • Perceptual: How to read the customer and the environment. (Spotting signals, reading body language.)
  • Approach: How to approach a customer in such a way that they welcome it and the sales person feels comfortable doing it.
  • Connect: This is the crunch stage: Make an emotional connection with the customer with what you do and what you say.
  • Enable: Not sell, but help the customer buy by saying and doing the things in a way that maintains that emotional connection. This would include, for instance, the requisite product knowledge and so forth.


3. Community Engagement

This is NOT CRM – but about creating an environment where there is a dialogue in a non-threatening (desirable, actually) way where the past customers become brand advocates – not for what you get out of it, but for what they gain. (We started a program 4 years ago for a large publisher, and they are now reaping the benefits from these relationships as the industry is undergoing much turmoil – because the initial design of the program was solely about adding value to their distribution network.)

D. Summary

All of the above is reflected in this diagram below:


Apologies for a long post, but it was important.

In the beginning I said it was simple. I did not mean that it was easy.

In fact executing ‘simple’ is never easy. It is hard. But that, dear reader is the game we chose to play – and admit it – you love it too :).

Have fun…


Ganador is a learning and development agency that turns employees into brand ambassadors and suppliers into partners. Email Dennis with questions.


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