How is Success Defined in Your Retail Company?

Through our retail sales training programs and consulting practice our firm helps dozens of retailers improve their results every year.  Many times they contact us about presenting to a group of their leaders about how they can improve the sales management practices in their retail stores.

As part of our preparation for these events we like to spend some time on the phone or even in their stores learning about their sales and management processes.  That begins with learning more about how they measure success at each level of the business.

Does Everyone Know the Definition of Success?

While it is counter intuitive, it is not unusual for us to find that people at the various levels of the retail organization have different views of what success is and how it is measured.  At the top level they might be looking at metrics such as cash flow, gross margin, revenue to budget, net promoter score or operating profit.  Yet at the store level we often hear much more nebulous things like “making customers happy” and “earning commissions.” 

When we run into this situation we almost always skew our talks and our advice toward improving measurement and consistency throughout the company.  That is because studies show that organizations and people who set specific goals are able to outperform those without measured goals by 20%, 30% or even 50%!

What Should Retailers Measure?

During the first half of our retail sales management training cloasses we often focus on metrics of KPI’s in order to gain a universal definition of success.  In many cases, the specific metrics do not matter.  The key is that everyone in the organization…Owners, Home Office Management, Field Management, Store Leaders and Sales Representatives are focused on the same things and moving in the right direction.  That being said, we recommend that retailers focus their KPIs in the following areas: 

Revenue Generation – Typically measured in year-over-year sales, sales to budget or sales to forecast .

Gross Profit – Can be measured as gross margin percent, gross margin dollars to budget or through the attainment of sales targets on key products or services

Expense Control – Can be measured as expenses to budget/forecast, payroll as a percentage of sales, and attainment of sales goals or commission for sales reps

Inventory Management – Can be measured as inventory shrink, inventory turns or percentage of discounted sales

Customer Service – Can be measures as net promoter score, through customer surveys, percentage of repeat customers or mystery shopping stores.

Goals without Measurement Don’t Matter

 Once we have defined success we can then spend the second half of the retail sales management seminar on how to attain them.  This involves everything from goal setting to coaching to retail training activities.  But a recurring theme through all of these segments is the importance of measurement and communication of results.

It is almost a universal human trait to want to achieve and compete.  The truth is that there are very few people who want to do poorly – and if they do it is likely that they won’t last long in your organization.  This key to long-term success is to make sure that the people who want to succeed have the tools necessary to do so. 

That begins with keeping score and communicating results on a regular basis.  This can be as simple as a handmade poster in the stockroom or as advanced as a computerized sales dashboard but it usually take less than 10 minutes a day to recognize your achievers and, as a result, motivate the rest of your team to achieve.

Would you like assistance with increasing revenue, reducing costs and optimizing you profits?  Contact us today for a free one-hour consultation!

–          David Goodwin is the Principal of the Retail Advocacy Group.  As a 30 year veteran of the retail industry he has directed the activities of hundreds of retail locations and thousands of retail sales representatives and store managers.  RAG offers consulting services, retail sales training and management training programs.   You can learn more at