Score the Sale

Five ways to drive customer conversion rates in your stores

Mark Ryski

August 15, 2011
Same-store sales are looking a little flat, and you need to find ways to deliver better results. There’s still a scent of the financial melt-down lingering, but you survived that crisis, and it’s time to start getting the sales needle to move in a positive direction.

There are only three ways you can drive sales in your stores: (1) encourage more prospects to visit your store; (2) increase your average ticket and (3) increase your conversion rate—that is, sell to more of the prospects already visiting your stores. These are the folks who drop in, but don’t buy.

Before you can fully explore the ways you can drive conversion, you must actually track traffic and calculate conversion rate in your stores.

First step: You need to track prospect traffic. This is not the same as transaction counts. Lots of retailers are confused about this. Transaction counts represent people who made a purchase; traffic counts represent the total number of people who came to the store, including buyers and non-buyers. Conversion rate is simply calculated by dividing sales transactions by gross traffic counts. For example, if you logged 500 traffic counts in your store and there were 200 sales transactions for the day, your conversion rate would be 40 percent (i.e. 200/500).

As you can see, without traffic counts, you can’t actually calculate conversion rate. If you can’t calculate conversion rate, well, you can’t improve it. So for the roughly 35 percent of retailers who actually track traffic and conversion rates, here are five ways you can improve conversion rates in your stores.

  1. Understand why people don’t buy: Long till line-ups, AWOL sales help, out-of-stocks, poor merchandising—the list goes on. Watch customers as they move through your store, and it won’t take long for you to identify some actions you can take to turn more visitors into buyers.
     
  2. Align your staff to traffic, not transactions: Staff scheduling is tricky at the best of times, but aligning your staff resources to when prospects are in your store will help maximize your chances of converting more of them into buyers. Pay particular attention to lunch time, when store traffic can be way up, but staff lunch breaks can seriously drag down conversion rates. Associates need to eat, but customers need to be served.

  3. Look for conversion leaks, and plug the holes: Traffic volume and conversion rates tend to be inversely related. That is, when traffic is high, conversion tends to go down or sag. When traffic levels are low, conversion rates tend to go up. Review traffic and conversion patterns in your store by day of week and by hour to pinpoint sags when sales are being lost.

  4. Set conversion targets by store: If you don’t have a conversion target for your store, you need to set one. It’s important to remember that every store is unique, and conversion targets should be set uniquely by store.

  5. Make conversion a team sport: It takes the collective effort of all the staff to help turn prospects into buyers. From the cashiers and sales associates to the merchandisers—everyone in the store plays a role. So don’t think of conversion as merely some business metric, but rather a simple measure of how well the whole store is doing at helping people buy. A good way to help improve conversion is to ensure all your staff understands what conversion is and that each of them helps influence it. Ask your staff about why they think people don’t buy and what the store can do to improve conversion rate. Discuss targets, get them to buy-in and share results. Create excitement about moving the conversion needle, and you will significantly improve your chances of actually doing it.

Mark Ryski is the founder and CEO of HeadCount (www.headcount.com.), an analytics firm specializing in store conversion. He is also author of “Conversion: The Last Great Retail Metric.”
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