Jan Davis, Advisor, Market Vue Partners
Performance Vs Potential – Are my top performers my top performers?
How are your stores doing so far this year? Same store sales up or down? How do you measure and reward your far-flung teams? And how do you know whether they are really building the business or just lucky?
So many factors influence the success of an individual store or unit. Our analysis shows location is the most important factor of all, accounting for up to 70% of the success of a specific store. So are you rewarding people who are really top performers or rewarding those who happen to be in a great location? And are managers who are doing a great job in a poor location losing out?
Here are a couple of ways to measure potential so you can really reward your strong performers.
First, you can do a market potential analysis for each store or unit, looking at the spending propensity of individuals and households that live within each trade area. Market Vue has found trade areas can be as small as a three minute drive time or as large as a 15 minute drive time, depending on density and store offerings.
Second, you can monitor customer traffic to see how many people walk into your store and then measure the percentage of those people who transact. The higher the conversion rate, the better.
At the end of the day, it all comes down to location!