Increased Sales Despite Low Traffic 

by: James Hallman (from a letter to clients)

I just finished a meeting with a client who has been struggling all year to get his sales back on track.

He is a disciplined buyer: he has had a 98 % Performance Factor ($ sell-through) for the spring season, and his 90 day Freshness Factor is 75%.

Still, traffic has been way down in the store and consequently year to date sales were down a little over 2%.

He is currently trending to a July sales increase of 104% to plan, and 42% over last year.

I asked if traffic had picked up. He said, “No, traffic hasn’t, but WE have.” Here’s the story:

About 3 months ago they reinstated a process which we developed almost 3 years ago, but had gotten dropped. It was a simple way to measure the “closing rate” for the store; out of all the people who come into the store, how many (what %) do we actually sell something to?

They felt that their closing rate had to be about 70 to 75%. But, when they started back to measuring it, they discovered it was only averaging 27%!

Naturally, this became a subject for their WEEKLY SALES MEETING. In discussing it, a few things came to light. Some people walked because they did not find what they were looking for. (They made a list of these items and brought in what they could, of those which were meaningful). Also, they discovered they had lapsed back into using those oh-so-pitifully-inept words like “Can I help you?”, and to make it worse, when they did present something to a customer, they were talking features of the product, not benefits. And, they weren’t getting rapport and asking questions.

Long story short, they made improvements, and their closing ratio went up from 27% to 54%- TWICE the sales on the same traffic! And, it is continuing to improve.

The simple system we had developed to track the team closing ratio? Poker chips. Red and black poker chips. Each time a customer left the store, whether they bought something or not, a red poker chip was tossed into a coffee can. If they had bought something, a black chip was also tossed in. At the end of the day, as part of the store closing procedure, the chips were counted and the results entered onto a log sheet. 20 red chips and 5 black chips meant that 5 out of 20 customers bought something- a closing ration of 25% for the day.

With all the money we spend on inventory, all the money we spend on location, all the money we spend on marketing, all the money we spend on payroll- wouldn’t it be GREAT to KNOW what our closing ratio is,- and whether or not it is improving or sliding?

Just a thought….

ABOUT THE AUTHOR: James Hallman has over 40 years in retail management, both corporate and entrepreneurial. For the last 18+ years, he has operated The Hallman Company, a retail consultant agency based in Atlanta, Georgia. The Hallman Company specializes in bringing best-of-class services to best-of-class specialty retailers. Services include inventory planning with pre-calculated open to buy, and team management training.