Running a successful wireless retail business is virtually impossible without data tracking. One way to track the right data is by deciding what your KPIs, or Key Performance Indicators, will be in your weekly, monthly, and yearly tracking.
KPIs are important because they help you monitor your store’s growth, staff progress, goals, and milestones. Without KPIs you are in the dark. So, if you don’t have KPIs currently, or if you don’t track them yet, stop what you’re doing and read this cheat sheet for KPI tracking.
Key Performance Indicators for Wireless Retail Stores
1. Sales and Gross Margin
Sales: Businesses sell, and how much you sell is the core reason you are in business. The total sales you make impacts your entire business so be true to get as micro focused on this as you can. Track sales across stores, devices, accessory types, and more so that you can identify trends and capitalize on those for future growth.
Gross Margin: Gross margin is important to track as well because it is the difference between the revenue and the cost of goods sold. You find this by taking the costs of goods sold and dividing it by the revenue. It is expressed as a percentage and gives you insight into your business’ financial performance.
2. Frequency & Severity
If you have a wireless retail business, chances are you have an extended warranty or protection plan program in place to offer your customers. If you do not have this in place, make it a priority today. It is an excellent way to earn recurring revenue on each customer you sell a phone to, including BYOD customers (if you are partnering with W3 Solutions). If you are currently using a warranty program, it is important to track frequency and severity as a KPI.
Frequency and Severity are important to know when trying to run a profitable warranty program because together they help you to understand the total amount of Required Reserves needed to pay for the cost of repairs. Without the knowing your Required Reserves, you may end up having insufficient funds needed to cover repairs.
What products are being returned? How often? Are there trends across products, seasons, or accessories? Knowing how many, when, and how often products are being returned is critical to track so that you have a clear picture of your store’s profit margins and how to stock for the next launch.
4. Profit and Losses
Most businesses focus their time on tracking profits, but do not overlook losses. Some losses are inevitable which can help you manage expenses and formulate your pricing strategy. The more losses that you can predict, and therefore avoid or make up for somewhere else, the better your profits are going to be in the long term.
5. Total Customers Seen
Start tracking your potential customers that come into your stores, even those that don’t purchase anything. Foot traffic, website traffic, and any other sort of traffic where your products can be purchased is important to know and keep track of. When you know this number, you can identify the total conversion per day, week, month, quarter, and year. This will help you understand your growth currently and help you predict future growth as well.
6. Total Transactions
The number of transactions that take place in a given period of time is important because it helps you assess how well your sales team is performing. Is the conversion rate (guest to paid customer) normal? Is it low? When you know this number, it will be easier to monitor and critique your staff on ways to help make the store more profitable.
7. Average Customer Spend
On average, how much is each customer spending at your store? Is a protection plan a part of that spend? Are they buying accessories? By understanding the average spend, and how that spend is allocated across your product offerings you will be better able to see the opportunities available to your business and where to train your staff next.
8. Year-Over-Year Metrics
Metrics are fine to have in the present time, but become considerably more meaningful when you compare this information across years. This means that you should not throw away the data each month. On the contrary, keep a log and reference it back to the date. How did we perform in May 2015 vs. May 2016? Did we grow? Did we falter? If you don’t have this information in place yet, do not fret. You’re taking the right steps to get started.