With an influx of communication channels, customer interactions, and online analytics, making sense of the key retail metrics at our fingertips can be challenging, especially for furniture and mattress stores. However, to expand market share, bring in more revenue, and improve the lifetime value of your customers, here are six key retail metrics you need to track.
Customer acquisition costs
Definition: The total average cost spent to acquire a new customer, including all spend for ads and other marketing tactics, salaries, and overhead.
How to calculate it: Take the total spend for acquiring new customers (marketing spend (including ad spend), salaries (including commissions and bonuses), overhead, etc.) in a given period and divide it by the number of new customers acquired in that time.
Example:
Your furniture store spends $8,000 in ads and other marketing programs in Q1. Add in $30,000 for salaries and another $40,000 for overhead, divide by the number of new customers in Q1, and your equation should look like this:
$78,000 / 300 = $260 per customer
Why it matters: This number tells you how effective your customer acquisition strategies are related to the cost and provides a general overview of the marketing budget. If you notice your customer acquisition costs increasing with new digital marketing techniques, it’s time to revisit tactics and channels to ensure your customer acquisition cost is manageable.
How to improve it: Ad campaign spending and other customer acquisition methods can add up. But do you know what is low-cost and has a 98% open rate? Text messaging. Consider adding a textable number to the customer journey. This is a low-cost way to let potential furniture shoppers come to you when they’re most likely to convert and on their preferred channels.
Another effective acquisition tool is web chat. Because most furniture shoppers research online anyway, a web chat platform is a good way to interact with them and provide personalized help.
Modern customers require modern acquisition strategies. Reach your customers with effective and low-cost methods like texting and web chat—answer common questions, resolve concerns, and win the trust of potential customers.
Lead response times
Definition: The average time it takes for your business to respond to leads.
How to calculate it: First, you must calculate response times for each lead type. Add up the total response times of all leads in a given time frame (including phone calls, texts, emails, social media messages, or any other type of lead) and divide it by the number of leads in that time.
Example: In Q1, your business responded to Facebook messages within 4 hours, texts within 5 minutes, phone calls within 20 minutes, walk-in customers in 1 minute, and email forms in 1 week.
Why it matters: Customers have become accustomed to instant answers, one-click purchases, and two-day shipping. If you’re not quickly responding to leads and inquiries, you’re losing customers to your competitors.
How you can improve it: Use software that aggregates all customer interactions into one inbox rather than trying to respond to several different customers on several different channels. You (or a bot) can easily respond in real-time when all your leads are managed through one inbox.
Web chat conversion rates
Definition: The total percent of web chat conversations that lead to a transaction.
How to calculate it: Take the total number of web chat conversations in a given timeframe and divide it by the number of web chat conversions in that time.
Example: Your furniture store had 4,000 web chat leads in October, and 1,000 of those customers converted on web chat.
1,000 converted customers / 4,000 web chat leads = 25% webchat conversion rate
Why it matters: Adding a web chat platform can significantly increase your number of inbound leads and online transactions. In-store conversion rates might be limited because consumers shop more frequently online, so this additional resource can make a big difference to your bottom line.
How to improve it: With the right website chat platform, these conversations aren’t limited to one browser session. Customers begin on the website but transition the conversation to texting. This can help improve conversion rates by using a channel customers are familiar with and can return to over time.
Google Ratings
Definition: The number of reviews and the average star rating of your Google My Business listing.
Example: In this example, there are 928 Google reviews, and the average star rating is 4.4.
How you can improve it: If you’re not already educating customers on how reviews help your business and inviting customers to leave reviews, begin there. 76% of customers asked to leave a review will. Automate the ask with a post-purchase text link, and customers are even more likely to leave reviews. The smoother your customer experience is from beginning to end, the more likely you’ll receive positive reviews.
Best performing location
Definition: The city or store location with the best performance based on a series of metrics you decide (e.g., sales, conversions, customer reviews, etc.).
How to calculate it: Based on your topline metric, calculate the equation for each store location to compare it against the others. Which location brings in the most sales? Which location is the most profitable? Which location boasts the highest conversion rate? Which location has the highest customer review ratings?
Why it matters: There are a number of factors that may contribute to variation in location performance: local management, locational logistics, store layout, employee training, and more. But once you know which location is performing best (based on your specific standards), you can then evaluate which tactics you can implement in your other locations.
How you can improve it: Customer feedback provides locational insights that come no other way. Send a quick text after a customer converts and ask about their experience. Send a link to a customer satisfaction survey or ask customers to rate their experience on a scale of 0 – 10. This will help you decode and address possible reasons for location performance (or underperformance).
Lead sources
Definition: The original point where a customer hears of or first interacts with your business.
How to calculate it: Send a post-purchase survey via text, email, or printed card (perhaps in-store), asking customers how they found your business.
Example: Using a Customer Relationship Management (CRM) platform or a customer database, you can track customers as they come in through referrals, email promotions, Google My Business, social media leads, etc. Review your data to see what your top lead source is.
A furniture store acquired 100 new customers in Q2. 60 originated from Google search queries, 10 from word-of-mouth marketing, 5 were driven by the business, 15 saw an Instagram ad, and 10 clicked on an email banner ad.
Why it matters: Evaluating your lead sources helps you prioritize your efforts based on what’s working and where you have the potential to grow. If traditional marketing methods aren’t effective, you can explore other options and track the conversion or click-through rates on Google My Business or other advertising platforms.
How you can improve it: Give customers the opportunity to connect with your brand on their preferred platforms. This could be social media, text conversations, email, or other. Ask your customers where they’d like to connect with you, and you’ll be more likely to attract potential customers through those channels.
Tracking and optimizing these six key retail metrics—customer acquisition costs, lead response times, web chat conversion rates, Google ratings, best performing locations, and lead sources—are vital for your store’s success. By keeping a close eye on these key retail metrics, you can make informed decisions that enhance your marketing strategies, improve customer interactions, and ultimately boost your store’s revenue and market share. Modernize your approach with data-driven insights and watch your business grow. Start implementing these practices today, and you’ll be well on your way to transforming your store into a market leader.
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