The key to success. What indicators help identify potential business risks
12.02.2018 5527

The key to success. What indicators help identify potential business risks

Today, when the country's difficult economic situation and many shoe stores feel the negative impact of the financial crisis, it is necessary to be especially careful in business planning and development strategies. There are about 75 indicators by which you can track upcoming problems in any business, including in shoe retail. Expert SR - business trainer Vladimir Thurman - talks about the most obvious of them and explains how to build the right system of key indicators, based on which you can stop the drop in sales, revive trade and increase sales in your store again.

Vladimir Thurman Vladimir Thurman - Leading expert on the commercialization of innovations in the Russian Federation. Chief offsets from competitors. He is the author of the only step-by-step methodology in Russia and the CIS for developing a unique selling proposition and bringing a business into a non-competitive space. Supervisor of NP "Resource Center for Business Development".

In the current economic environment, it is advisable to learn about upcoming problems in advance. The first and most important thing that any leader has in order to navigate in the current situation and take any action, depending on the circumstances, is:

  • general business development strategy;

  • upstream strategy;

  • life cycle strategy.

Many entrepreneurs and business owners believe that the only indicator they need to track is profit, or sales. This is their fault and the trap into which they fall. Neither sales nor business profits ever warn of impending problems. They are only post factum indicators that state the fact when you see that over the past month sales were low or even rose. In this case, it’s really late to change something, since you already received a negative result. Therefore, it is necessary to start with drawing up a sales plan, which should be based on monitoring key business indicators available at a given moment, and their possible impact on the future of the company. It is knowledge of key indicators and built key scorecard help you see emerging issues long before they become real and endanger your business. Let's consider the main key indicators.

1. Passing traffic

The first key indicator is traffic passing by the outlet. It must be taken into account - to make selective measurements on weekends, when the influx of customers is maximum, and on weekdays, when the flow and buying activity fall - in order to have an idea of ​​the minimum number of customers passing by.

What is it for?

To work with the entrance group of the store and its competent design. The information received about the traffic passing by is useful when you post another announcement about some special promotion, sale, or when you decorate a showcase for the holiday. It is important to always know how certain design elements of the entrance group affect the number of people entering.

Here we can give a very revealing example, which most owners of shoe stores are most likely not aware of. McDonald's, the world leader in franchise profitability, before opening its new outlets, determines the most suitable places with maximum traffic through the data ... aerial surveys.

Passing traffic is influenced by various factors that you need to keep in mind. For example, in small cities, the key indicator monitored by entrepreneurs is the issuance of wages to working citizens: if you are paid a salary, then everything will be fine in retail, if the salary is delayed at some city-forming enterprise, then the goods will be sold poorly, and what kind of product -to work additionally, to do something to attract visitors and stimulate demand. In large cities of Russia, it is becoming more and more complicated; retail store owners must simultaneously consider different key indicators.

The traffic passing by is important to consider and take into account in the work, first of all, for free-standing shops. If you opened a store in a shopping center or on a specific shopping street, then your store will have the number of passing customers that has a shopping center / shopping corridor. Here you depend on how the management company or the owner promotes the shopping center / trading area, what stocks are developed and promotional campaigns are conducted to attract additional visitors and increase traffic, the number of buyers.

2. Amount of traffic

Second key indicator - amount of traffic, and there is a very important point: the percentage of people who come to the store and immediately make a purchase is very small. Practice shows that, picking up shoes, a person visits several outlets: men can go to 5-7 stores, women are able to “peek” at 9-12 and more.

If a person went into the store and did not make a purchase, then in this case it is possible to evaluate and analyze many indicators that directly or indirectly affect the decision by the visitor to make a purchase or refuse it. Here are just some of the questions an owner or manager should ask themselves:

  • Was the first meeting with the customer held correctly, what was the seller’s greeting?

  • What atmosphere is created in the trading floor?

  • How clean are floor mats in the trading floor?

  • How correctly, correctly merchandising is applied?

  • Are there enough mirrors in the trading floor and how convenient are they located?

  • How visible is the discounted product information from the entrance area?

All this and much more affects whether the customer returns to this outlet again.

3. Number of Returning Visitors

The third key indicator is number of returning visitors - an indicator by which you can understand how the staff works. If the seller makes less than the first sales, but he has the maximum percentage of the number of people returning for the purchase during the second visit, then this specialist works more efficiently than others, and he needs to be more stimulated - give additional bonuses, bonuses. Ideally, the entire personnel management system should be designed in such a way as to stimulate salespeople, motivate them to work more actively and efficiently with visitors.

People came to the store, but left without a purchase. This means that your advertising worked, and the staff reduced the result of advertising to zero, that is, you spent advertising money in vain. This serious problem should be solved both by the development of special marketing materials, and systematic training of personnel. The staff must be trained constantly. Mandatory minimum: 12-hour external training should be held once a month and internal training every week. Trainings of sales floor employees should become the main strategy of the company during a crisis, because consumer demand, although it falls in crisis, but never stops.

Particular attention in training should be given to working with objections from visitors - this is the most difficult part in the sales process. The most common forms of objection:

  • I'm just watching;

  • we need to think;

  • we will definitely return to you;

  • I do not look for myself - for my son, daughter, mother, father, aunt, etc.

All these excuses, which are not invented by visitors who are not interested in buying, are often heard by sellers and, at times, do not know what to say in response. There are about thirty such common objections in the world, and for each of them there are 10-15 proven methods for how to close these objections and how to work with them to convince a person and still sell him a product or service.

When deciding on the development and printing of special marketing promotional materials, booklets, leaflets, business cards that stimulate demand and encourage visitors to make a purchase that sellers are required to give at the exit, you must clearly understand when and how your employees will do it. Ideally, this should be a special offer, some kind of gift or bonus: for example, if a customer makes a purchase within the next week, he will receive 20-25% discount, or 50% discount for the second pair of shoes on the check, etc. There can be many ideas here. With a competent approach and the implementation of such demand-stimulating stocks (forcing the client to return and make a purchase), an increase in sales can range from 34 to 72%.

4. Volume of sales

The next key indicator is sales volumeж, the increase of which is influenced by a huge number of tools, for example:

  • increase in the size of the average check at the time of purchase;

  • repeat sales to existing customers;

  • expansion of the trading assortment with new products / services.

5. Rate of return

The fifth key indicator is rate of return. Over the past year, the cost of quality shoes has increased significantly, since most of the goods presented on the Russian market are imports, including from Europe. In pieces (pairs of shoes), the sales volumes for objective reasons (sanctions, a growing dollar and euro) have become less, in terms of money, as a rule, the numbers have not changed due to inflation and the galloping ruble, therefore, the first place for retail stores customer loyalty indicator - The number of repeat sales to existing customers. This is a very important point, because as soon as the number of repeated sales to existing customers begins to decrease, people stop coming to the store, the owner / manager should not sit idly by and wait for a miracle, but act immediately. First of all, it is necessary to instruct the marketing department to conduct a survey / study: what is the reason that people stopped buying shoes in our store? Data from open sources, competitors, general statistics, citizen surveys, guerrilla marketing, etc. can be used.

Ascending or Ascending

If we talk about the ascending and descending life cycles of the company, first of all, it is necessary to take into account such an indicator as the size of the advertising budget. The advertising budget cannot be reduced during a recession. Moreover: the manager / owner must do everything in order to increase this budget, but in no case to reduce it. Negative experience in the use of advertising media (inefficient spending, lack of expected results), usually due to the fact that there was no control over the return on investment, individual identifiers were not introduced in order to monitor the effectiveness of advertising on each channel, other factors should not be taken into account.

The upward life cycle begins to work when your competitors begin to cut advertising budgets, payroll. You must, in spite of everything and against all odds, increase your sales. But the increase in sales will not happen just like that, with a wave of a magic wand, for this you will have to work. There is good news from which to build on: an increase in sales is possible even in times of crisis just because people will never stop buying shoes, this is a physiological need for the first need. Therefore, proceed from this and act.

So, your competitors, in a period of economic difficulties, when we are all thrown from side to side, like on a roller coaster, begin to cut advertising budgets, payroll and additional payments to the best employees, refuse to train staff. If you want to not only stay afloat and survive, but to continue to increase sales, increase turnover and make a profit, all this is not recommended. On the contrary, during the crisis, you must leave the previous, pre-crisis, amounts of funds for advertising, staff training, and the salary fund at the same level in order to obtain, based on the practical experience of the business community, up to 50% of the existing sales volume of your competitors. A properly launched strategy of an upward life cycle within a business helps increase sales due to the sales volume of competitors starting to live in austerity mode.

The opposite situation - a downward model of the life cycle within the company - develops when a business launches a strategy by itself, sometimes not even explicitly. Owners / managers very often launch it when they reduce advertising costs, which is often done in the first place: the first thing that goes under the knife in difficult life situations is advertising and PR budgets, while management does not think at all about what will be further - how will the product / service move forward, how will the consumer learn about it / about it? As a result, this inevitably leads first to a decrease in the number of customers and sales, then, as a result, leads to a decrease in salaries for employees (sellers and other employees of the company), and the most active sales managers who are always in demand and can quickly find new good job, the first to leave the company. The sales skills of the remaining sellers are getting worse, their motivation is falling, and this makes sales less and less. And again, advertising costs are reduced (management / owners mistakenly believe that this is their salvation) and, ultimately, all this throws the business into the abyss, from which it is very difficult to get out.

To prevent this from happening, you need to constantly monitor the state of your business through tracking key indicators. These seemingly very simple coefficients, in fact, turn out to be very important components of the system, by building which you can work stably even in the current crisis conditions, continue to increase sales and make a profit.

This article was published in the 131 issue of the print version of the magazine.

Today, when the country's difficult economic situation and many shoe stores feel the negative impact of the financial crisis, it is necessary to be especially careful in business planning and ...
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