Retailers could be setting themselves up for failure if sales targets are not worked out properly. This is the clear warning from retail consultant Paul Da Silva.
Da Silva points out that everyone in a business, from the managing director to the designers and salespeople, is running blind if they don’t have targets to work towards.
He outlines the two basic ways for retail showroom owners to arrive at sensible sales targets. One is to determine the break-even point for the business and, he suggests, maybe double that. Or simply come up with an aspirational figure they would like to achieve.
But above all, Da Silva says that success requires the involvement of everyone in the business. He said: “The most important thing about targets is that the whole business should know what they are and what you are trying to achieve.
“I’ve worked with some of the large national retail chains and would always ask the warehouse staff what the branch’s sales target was for the month. In the successful branches, they knew exactly.”
This, he pointed out, needs to be made known to all staff. He added: “They should be discussed regularly and constantly updated on a visible operations board, where people can see what progress is being made.
Once you have your annual number, you then need to break it to down into monthly chunks.”
Da Silva breaks it down in terms of kitchen/bathroom/bedroom sales required per month. He spells out how many enquiries and leads are needed, based on conversion rates, to achieve the desired targets.
He also outlined how to spot early on how well a business is shaping up. “The value of your lead bank is a very important indicator of how you are shaping up for your target number,” he pointed out. “If you want to sell 10% more than you did for the same month in the previous year, but your lead bank is 20% less than it was then, you know you are going to be facing an uphill battle. So make sure you are monitoring your outstanding business.”
He concludes that retailers need to play it SMART when it comes to fixing targets, suggesting that they should be Specific, Measurable, Attainable, Relevant and Time-specific.