business advice - Craft Focus Magazine

usiness advice
how effective are your staff?
With the abolition of the default retirement age, measuring the effectiveness of your sales
staff is more important than ever. Nick Waller owner of Driving Performance Ltd provides
some advice and tips
magine for a moment
that you’re the coach of
your favourite football
team. Your team is vying
for a spot in the final and
you must decide which
of your players will start
in this very important
game and which will spend it on the bench
as substitutes. How are you going to make
that decision? The answer should be obvious,
whether you follow football or not. You need
to analyse the effectiveness of each player.
Naturally, you want to start the one who has
done the best job for you thus far. Fortunately,
you have plenty of statistics available to be
able to make such a decision. In order to
judge the effectiveness of each player you’ll
need to look at statistics such as of the total
number of passes they made, how many made
it to the intended receiver, how many were
intercepted by the other team, how many
resulted in a goal, etc.
Now, let’s get back to reality. You’re
responsible for the effectiveness of your sales
staff. Imagine you have decided to refit the
entire store. During the refitting, expected
to last at least three months, the store will
remain open but will not require as many
salespeople as you currently have. Who do
you keep and who do you let go?
Do you have the information you need to
measure the effectiveness of your salespeople?
A valuable technique you can implement
immediately is tracking the “conversion
rate” of your sales staff. On the ground level
the information you get by tracking each
salesperson’s conversion rate will enable you
to measure the effectiveness of each customer
contact. In other words, out of every ten
customer demonstrations, how many sales
did each salesperson make?
Implementing a system for tracking
conversion rates is relatively simple. Each
salesperson should have their own conversion
rate card. To track their effectiveness,
every customer demonstration gets
recorded as either a “walk” or a “win.” For
example, on Saturday Joe had 20 customer
demonstrations, four of which resulted in
a sale.
To calculate his conversion rate, you
divide the total number of sales (four) by
the total number of demonstrations (20).
Joe’s conversion rate for Saturday is therefore
20% or two sales out of every 10 customer
demonstrations. Bear in mind that the
actual number of customers you see has no
relationship to your conversion rate. If Joe
had made one sale out of five demonstrations,
his conversion rate would still be 20%.
Implementing the Conversion Rate System
It’s very important that you have a clear
definition of what constitutes a “customer
demonstration”. Some business owners and
managers count any customer who walks
through the door as an opportunity to
make a sale. Others prefer to only count the
customers to whom salespeople are actually
able to get to the demonstration. A word
of caution is needed here. It’s possible that
one salesperson could fail to get into the
demonstration to a customer where another
salesperson may have succeeded. Think about
which method will work best in your store.
The criteria you choose is not that critical.
What is critical, is being consistent and using
the same criteria all the time. Remember, you
can only get accurate information if you keep
accurate records.
To implement the tracking of conversion
rates, you can easily make up a supply of
conversion rate cards onto ordinary three
x five index cards. Your volume of business
will dictate how frequently you should
calculate your conversion rate. For most retail
stores, it’s best to work it out daily. If you see
relatively few customers each day, you can
keep it on a weekly basis. The salespeople
must be trusted to keep true records of their
own conversion rates.
“The rule to remember when
selling is: First sell everyone
something, then sell them more.”
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