“What are the KPI’s (Key Performance Indicators) that you review every morning that indicate how your business is moving?”
I ask the question above often to franchise owners. They have a flood of data that could help them grow their business or as I ask above, “moving”. More often than not, I get a flippant answer like, “If I have money in my account I know I am OK.” That is exactly like watching the end credits of a movie and deciding on the quality of the movie without allocating the time to actually SEE the movie. So, what do you review?
Customer counts are the life of the business. If you get someone to enter your store, you own them. You can easily lose them and any sales if you don’t perform, but usually you can make a sale. Are you increasing the number of customers or are you leaving that to chance? The COVID-19 pandemic is a prime example of how most businesses fail. They fail because they fail to do something to get customers. Now, you can’t have them in your location, but you can still interact with them and stay relevant. You don’t always have to sell to someone to keep that customer and add more. You just need to be in front of them and inviting them into your world.
Average ticket is the total of all sales divided by the number of customers. What is the average of the sales you make. What is one customer worth? If you can’t answer these questions, you are missing great data and a motivating factor in the growth of your store. I blame public schools for not making you more aware of this math problem. Yes, I said “public schools”. Your Grade Point Average (GPA) is essentially the same math equation. An “A” gives you 4 points, a “B” gives you 3 points and so on. What ever your total grade value is will be divided by the number of classes you took that semester or quarter or however long the session is. The total grade points you earned in school is divided by the number of classes you took. That is your GPA. So, what’s your business GPA?
Do some math and find out the average ticket value of sales in your store. Now, every sale should be looked at as Above or Below that amount. Get your team involved and you can have some fun while growing your business. I ran a video store for a while and the area manager wanted sales higher. I figured out the average ticket amount and told my team to crush it! I offered a pizza party if we could make that happen. They almost doubled the average ticket in a month. I rewarded them and the area manager chewed me out for not doing this sooner. I didn’t work there for long after that. Lift your team. ALWAYS lift your team to meet goals you set.
Net Provider Score (NPS)
What is your net provider score? That is the score of the feedback you get on your business. If your franchise doesn’t use NPS, then use the feedback from your Google My Business page or Yelp or any of the feedback scores you get. Are you increasing the quality of your customer interactions or are you stagnant? If you are slipping, look to change the culture of your business. It is apparently toxic.
Customer feedback is a reaction to management and training. Does your team know what to do, how to do it, and do they WANT to perform for customers? What to do and how to do it are simple training exercises. Keep it simple and fun and let the staff add their personalities to the mix to add to the customer interaction. Wanting to do the job correctly is a function of how well you manage. If your team is letting you down often, then it could be your fault. Review the processes and ask for outside help to ensure the problem isn’t something deeper.
KPI’s Keep Your Business On Track
Know your business! Review what makes it tick and you won’t be surprised by the growth or the loss. You will be ahead of the turns that can affect your business and be able to keep customers coming in.
Now, go do your homework!