Sales management depends on an established set of metrics to achieve company revenue goals. Of course, what those key performance indicators (KPIs) are can vary greatly from industry to industry. Businesses depend on sales associates to be trained thoroughly on products and services so they can become top performers. The industry-specific KPIs managers use to help their employees reach company goals are the most important sales metrics. Top performing managers continually monitor categories such as product mix, customer engagement, and order quantity. Many other sales metrics can vary across industries and businesses.
Strong revenues and profits companywide are directly correlated to individual employees reaching or exceeding their sales goals. Restaurants, bars, salons, and retail stores each have a wide range of standardized methods to track sales performance. Fortunately, modern point-of-sale systems have software packed with features for gathering the data used to monitor the results of large quantities of sales transactions, no matter what products you sell.
Most Important Sales Metrics by Product Type
Product type is a high-level description for categorizing different items being sold. Menu choices for restaurants generally fall under:
The sales manager sets profit goals, in part, based on the quantity mix of these items per ticket. Some categories are naturally higher-margin sales than others. Mixed drink sales, for example, are the first choice among high margin sales for your restaurant or bar due to the mark-up. Other menu items to pay attention to are those that involve little to no preparation but still represent strong sales for the store. Sales analysis can reveal an unexpected profit margin increase when specific menu items are combined on an order.
Retail Product Life Cycle (PLC) Analysis
Retail and online stores, more than any other consumer industry, rely on product life cycle analysis (PLC) to track product development and measure profitability. Food, electronics, and even apparel have a shelf life. PLC analysis has four major stages:
- Growth (sales revenue/profits)
POS software begins gathering data from the date the product is added to inventory and stores it in the cloud. You get to choose how you want to use the data to create custom sales reports. Sales managers can use PLC to set incremental increases to revenue goals for the product which attributes to revenue growth. Maturity occurs when the demand for a product is expected to peak and marketing efforts adjust according to demand. Inventory turnover slows when a product is in decline. Retail PLC is one of the most important sales metrics for determining the continued success of retail products.
Sales Metrics that Produce Top Performing Employees
What can you do as a manager to ensure the success of your employees?
Cloud-based POS systems track multiple parameters that can be used to create reports and give timely feedback to your staff on their performance. You can only track what you can measure, so make the numbers count. According to Salesforce.com, “Regularly tracking a comprehensive set of KPIs and using the results to inform your strategy and goals is crucial for success.”
Sales metrics help employees stay on track to achieve professional goals. Choosing the right KPIs can help managers identify and reduce human errors. POS system deep data analytics can provide the business intelligence they need to grow an enterprise. Here are some examples of how integrated POS software features can help you to:
- Simplify the sales process
- Improve communication of employee expectations
- Improve customer survey results
- Improve the customer experience
- Increase customer traffic
POS metrics empower management to launch new sales programs that may not have been possible before. For example, you can customize display menus for sales associates to check their progress. As manager, you will be able to create sales cycle reports that run on an automated schedule, tracking:
- Sales cycle length
- Percent of employees achieving quota
- Percent of sales per customer contact (phone calls, website visits, and walk-ins)
- Opportunity win rate (upsells per number of orders)
- Average new tab size
- Revenue from existing customers vs. new customers
talech has helped thousands of companies to better measure their sales performance, from retail shops to bars, restaurants, and salons. Better POS solutions reveal new ways to potentially grow your business. talech representatives understand the small business owner and can help answer your questions.
Want to learn more about tracking sales metrics?