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The Sales & Retail Metrics You Can’t Ignore

As a small business, there are so many things to keep track of: payroll, taxes, employee benefits, budgets, sales, and more. It may feel like you have no bandwidth for extra work. But before you give up, take a little time to consider tracking important business metrics. In more ways than one, it will help you streamline and make the incremental improvements that pay BIG dividends.

There’s an easy way to do this. You may have heard the term KPI, which stands for Key Performance Indicator. Businesses set KPIs to stay on track and accomplish goals. KPIs will vary based on business type, but we’ve shared a few of the most common sales and retail metrics below. 

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Average Value per Transaction (AVT)

Referred to as AVT or ADT, this metric measures the value of the average transaction. AVT is calculated by dividing total revenue by the number of transactions.

AVT = Total Revenue / # of Transactions

AVT is an important metric because it allows you to track sales performance over time. Setting a KPI for a higher AVT will give your team a roadmap for increasing overall sales.


Units per Transaction (UPT)

Along with AVT, UPT is the main metric for businesses to monitor sales. UPT is calculated by dividing the number of units sold by the number of transactions.

UPT = # Units Sold / # Transactions

By identifying the current UPT and setting a KPI to drive up UPT, your business could see increased revenue. 


Average Unit Price

This is an easy one. Average unit price tells you the average dollar amount of a unit sold. It’s calculated by dividing revenue by units sold.

Average Unit Price = Revenue / # Units Sold

An uptick in average unit price could have a positive impact to your bottom line. For example, if your transaction volume remains the same and your average unit price increases by $2, that could mean increased profits.


Conversion Rate

Conversion rate = # Transactions / # Visitors

Conversion rate is another of the most common metrics. It measures the effectiveness of your sales staff and their ability to convert visitors to customers. It’s calculated by dividing the number of transactions by the number of visitors.

Depending on your business, you may already be tracking foot traffic. Some businesses use foot counters installed at the entrance. Others use hand counters or estimates. There are some hi-tech options available now, but they may be a bit pricey. Regardless of method, it’s important to measure the number of visitors to your business.

 


Sales per employee

It may be helpful to track the sales per employee at your business. This is calculated by dividing net sales by number of employees.

Sales per Employee = Net Sales / # Employees

You can use this to determine the effectiveness of your staff and assess if you need to make any changes. If you’d like to track individual sales, you will have to use your POS (Point of Sale) system.


Sales per Square Foot

Another useful metric is sales per square foot. This tells you if you’re effectively using your sales space. It’s calculated by dividing net sales by sales space square footage.

Sales per Square Foot = Net Sales / Sales Space Square Footage

Especially useful for businesses with high rents, this will give you insight and the ability to compare with other competitors. 


Email Capture Rate

You have most certainly been asked for your email address while finalizing a purchase. While this may be annoying (especially if the resulting emails are bad or overly promotional), it supports a very important function: email marketing. The email capture rate is calculated by dividing the number of new subscribers by total visitors.

Email Capture Rate = # New Subscribers / # Visitors

This is mainly calculated as an online metric. But you could also calculate it for your brick-and-mortar location by dividing new subscribers by transaction count. 


Use these metrics to evaluate the performance of your small business. With an increased focus on AVT, UPT, conversion, and more, you’ll be able to compare to competitors, track improvements, and refocus your team on driving sales volume.

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