Best Practices

Why a store may not measure performance against KPIs ❓

Mar 05, 2021 4 min read

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It is not difficult to identify the “unsuccessful” store — it is enough to see if the manager’s KPI is executed. The easiest and most fundamental decision in this case will be to fire someone, but if you do so, you risk losing a good employee who is simply a victim of circumstances. It’s better to find the cause of the situation.

the store cannot measure performance by KPI

Let’s find a global cause

The first step is to determine the level of the KPI failure: at the store level or the entire retail network. This can be done by comparing stores with approximately the same characteristics:

  • location — it is necessary to consider cities located in the same climatic region, similar in terms of consumer basket and level of population profitability (for example, Seattle, Denver, Boston);
  • store parameters — compare outlets similar in traffic, area, commodity matrix and other parameters.

If among several stores in equal conditions one does not perform KPI, it is obvious that the problem is in it. If several stores or even all of them do not have time at once, it is likely that you need to deal with the entire network in this region.

By the way, stores in retail networks are grouped by region not only because it is more convenient to visit them. It is easier to compare outlets in the same region with each other, as opposed to those in different regions.

For example, when people in the southern region buy shorts and ice cream, buyers in Alaska will be interested in other products. If you try to ask the Alaska manager about the reasons for the low sales of summer clothes, he will refer to the climate, and if the same question is asked to the store manager from the southern region, he will have to look for a more convincing answer.

Let’s find out the reason at the store level

The final reason for not performing the KPI could be anything. For example, in the fashion store the manager might not have time to put out a new collection on time and then, in the bustle of every day, even forget about it. Therefore, the collection is not in the store, it is not sold and the plan is not fulfilled. It can be so that merchandisers have put seasonal goods not in the entrance zone, but in the far corner, where customers simply can’t see them.

One of the key KPIs indicators is usually the close rate. Its low level may be due to the fact that the manager hired insufficient staff or the fact that he did not plan his work schedule correctly. As a result, there are not enough employees in the sales area during peak hours and potential customers leave without buying anything.

However, these are all individual cases and it is important for us to understand the root cause of such behavior of the store director in order to make a decision on correcting this situation. There could be three real reasons:

  1. The store manager lacks knowledge and skills.
  2. The manager deliberately fails to do his job.
  3. The manager just can’t give you the results you need.

Find out exactly what case you are dealing with, using QVALON.

Set tasks, monitor their implementation and give feedback

QVALON system is a convenient tool for monitoring the work of a store manager. It allows not only to control, but also to understand the reasons for a particular behavior. Let’s explain it by example.

The system provides the possibility to set tasks based on the results of the inspection and monitors the process of their implementation. If, in the course of elimination of the revealed defects, the store manager actively asks questions and after the rendered help successfully solves the set tasks, we are, most likely, dealing with the first case — lack of necessary knowledge. Such an employee needs to organize an additional stage of training and will be able to fulfill the KPI requirements.

If the manager successfully performs the tasks, but the next audit reveals the defects again, we have the second option. You can continue to work with him, but in this case, additional efforts will have to be made to ensure ongoing monitoring.

If the manager is unable to accomplish his tasks even with the help, or if it needs a lot of effort to do so, you are likely to be confronted with a third option — a person who is out of place. Only a person with certain prerequisites can become a good manager. In the absence of such prerequisites, neither training nor strict control will help. It would be more appropriate to change the scope of his activities.

Using QVALON, you will be able to find the exact cause of a store’s KPI failure and make the right decision to fix the situation.