Five Ways To Drive Customer Conversion Rates In Your StoresSeptember/October 2011
by Mark Ryski
Same-store sales are looking flat, and like retailers in all sectors, you need to find ways to deliver better results.With the scent of a financial meltdown lingering, it’s time to get the sales needle moving in a positive direction.
There are three ways to drive sales in your stores,
• Encourage more shoppers to visit your store;
• Increase your average ticket, and
• Increase your conversion rate. That is, sell to more of the shoppers already visiting your stores. These are the folks who stop in but don’t buy.
To a great extent, increasing retail sales has always been a two-trick pony: drive more traffic and increase average ticket. Driving traffic usually requires an advertising or promotional investment of some kind, and increasing average ticket, well, let’s just say that most retailers have been and are continuing to focus on this one. Driving conversion rates is a trick retailers often overlook.
First, do you actually track the traffic in your store? Only about 35 percent of all retailers do, and there’s some confusion as to what exactly “traffic” is. Traffic counts are not the same as transaction counts, which represent the number of people who made a purchase. Traffic counts represent the total number of people who came into the store whether they made a purchase or not. By dividing sales transactions by gross traffic counts, you can come up with your conversion rate. For example, if the traffic count in your store was 500 and there were 200 sales transactions for the day, your conversion rate would be 40 percent (i.e. 200/500).
If you don’t track traffic in your stores, you can’t calculate your conversion rate, and if you can’t calculate it, you can’t improve it. My advice to you is to start counting. That way, you can take advantage of these five key tips.
Understand why people don’t buy
A long line at the cash register, no one there to help, out-of-stock items and poor merchandising are all reasons why people don’t buy.
Find out what the reasons are in your store by spending some time just observing your customers. Resist the temptation to help and just watch how they move through your store. It won’t take long for you to identify actions you need to take to turn more visitors into buyers.
Align your staff to traffic, not transactions
Staff scheduling is tricky at best, but matching staff schedules to traffic volume and timing in your store will help improve your chances of converting more visitors into purchasers. Look at lunchtime, for instance. Store traffic may be way up then, but if your employees are taking their break, there are fewer salespeople on the floor to sell customers. It can seriously drag down your conversion rates. Associates need to eat, but customers need to be served.
Look for conversion leaks and plug the holes
Traffic volume and conversion rates tend to be inversely related. That is, when traffic is high and your store is busier, conversion tends to sag. Lines at the cash register are longer, and it’s harder to get help from an associate. The opposite is true when the store isn’t as busy. By examining the traffic and conversion patterns by day of the week and by hour, you’ll be able to spot those sags. They represent times when sales are being lost.
Set conversion targets by store
Goals and targets are key if you want to improve results. If you don’t have a conversion target for your store, set one now but consider this: Every store is unique, and if you have more than one store, each one should have its own conversion target. One store might be doing well with a 15-percent conversion rate, while another may be under-performing even though it has a 30-percent conversion rate. Move your conversion rate up relative to your store’s performance.
Make conversion a team sport
Don’t think of it asmerely a businessmetric, but rather a simple measure of how well the whole store is doing at helping people buy. A good way to improve conversion is to ensure all your staff understands what it is and how to influence it.Ask your staff aboutwhy they think people don’t buy and to come up with their own suggestions about how to improve your store’s conversion rate. Discuss targets, get themto buy in, and share results. Get them excited about moving the conversion needle and youwill significantly improve your chances of actually doing it.
Getting your store to capture just a few more of these lost sales can have a significant impact on overall sales results. Improving your in-store conversion rate is not hard to do, but it does take focus and attention. If you don’t track traffic or measure conversion rate in your store today you are missing out on a way to drive sales. You can’t improve conversion if you don’t measure it. Retailers who are focused on driving conversion rate have a significant advantage over those who do not.
Mark Ryski is the author of Conversion: The Last Great Retail Metric, and is the founder and CEO of HeadCount, a leading analytics firm specializing in store traffic and conversion.
For more information, visit www.headcount.com.