Service Providers

Using retail metrics to maximize business


One of the best ways to boost efficiency, productivity and sales at any dealership is to have the most up-to-date information available and accurate insights about the business at hand. Many owners and managers incorrectly assume or imagine what is thought or wanted is what is occurring at the company. However, as management guru Peter Drucker states, “you can’t manage what you can’t measure.” With a little time and effort, employees at the dealership can gather some key information to help identify the best use of time and resources to maximize business. Although many retail metrics exist, this article focuses on the following five measures: traffic, follow up, conversion rates, sell-through, turnover rates and return on investment. After discussing the analytics of these measures, crunching the numbers and identifying weaknesses are reviewed.


How many people visit the store each day during each hour of operation? What are the peak hours for visitation? Which department gathers the most interest? This metric can be gathered by security camera, reception tally sheet, door counter, or turnstile. Knowing how many people frequent a dealership, when the visit takes place and which department is being patronized can help maximize business through effective schedule planning. Which days and times are currently over- or under-staffed? Are full-time employees needed or would a part time employee that can work busy shifts be a better match for dealership traffic patterns? Traffic also involves measuring phone calls. How many calls are received per hour? Which departments are receiving calls? Do phone calls lead to store visits or to orders by phone?

Follow-up Information

One way to increase customer traffic is with repeat visits by following-up with visitors. Challenge staff to step up interactions with customers and visitors to the store. Staff should learn names and find out the reasons people enter the establishment — do not just settle for a “just looking”. Employees should be trying to gather names, phone numbers and email addresses for follow-up. Holding your front of house employees accountable for gathering these metrics will force them to hone customer relationship skills.

Conversion Rates

What percentage of store visitors make a purchase? The proportion of store visitors to the number of people who make a purchase is the conversion rate. Identifying the conversion rate assists managers in developing strategies for employee training, tweaking marketing and advertising concepts, and fine-tuning sales. Did that last promo ad work? Compare the conversion rate of a promotional week with a non-promotional period to determine the effectiveness of the ad. Which employees are closing the deals? Conversion rates can be increased by monitoring staff interactions for productivity.

Sell Through and Turnover Rates

Is a product selling through the ordered inventory? The percentage of items sold versus the number of items ordered and available to be sold is the sell through rate. Sell through rates help evaluate a product’s interest with customers, performance, and determine whether or not to stock the product or when to stock it (seasonal). Does a product stock turn? Inventory turnover (the number of times stock is sold through during a given period) is directly related to better business. That is, the higher the turnover, the higher the sales.

Return on Investment

For every dollar spent on inventory, how many dollars are returned? Return on investment is a great indicator of product performance and space maximizing potential. Items that bring more return increase sales and productivity.

Crunching the Numbers


Once a few weeks worth of information is gathered and analyzed, the metrics can begin to demonstrate valuable patterns and trends for improving sales, efficiency, and productivity and maximizing business. When do customers come in and is the staff scheduled to match up to those patterns? Taking the monthly operations budget and dividing by the hours a dealership is open will yield an hourly goal for profitability. What hours are profitable? Is the business making money in the morning, afternoon or evening? During the first hour or the last hour? How can staff be effectively scheduled to ensure customers are being taken care of while minimizing payroll?

Identify the Weaknesses

If advertising does not translate into an increase in calls or foot traffic that can be measured, then what efforts are not working? If calls and traffic increase, but customers are leaving empty handed, then staff are failing closing sales and this issue needs to be addressed with training. Everything a manager or owner does has a cause/effect on business. Making the effort to measure these metrics will help identify effectiveness and expose the problem areas. Remember, “if you don’t measure it — you can’t manage it!”

Scott Hochmuth is the owner of Real Performance Marketing, an Atlanta-based company representing seven different powersports related product lines in the Alabama, Florida, Georgia, Mississippi and Tennessee areas. He comes face-to-face with over 200 dealers every 8 weeks. He has been in sales since 1982 and started in the powersports industry in 1989 as a sales representative for a helmet manufacturer.

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One Comment

  1. As to part-time employees: many, if not most, part-timers have a weak knowledge base and/or limited skills. We’re in an industry where 1 weak employee effectively turns the entire store into a bunch of idiots if you listen to the comments on social media.

    It is critical the part-timer is capable of pulling off an intelligent conversation with your customer despite the lack of knowledge and/or skills. Minus that you will frequently have people commenting how the store sucks. If you’re going this route attempt to get someone that appears to be capable of pulling off that intelligent conversation, make sure sure they receive as much training as possible and stay on top of their conversations with the customer base. This is really true of the entire staff but heavily more so with most part-timers.

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