Chapter - Sales Management

Case Study: Sales Management

Now let's get back to the challenges at Jackson's Department Store. In this segment, you will now focus on implementing a proper sales management system.

Chapter 8: Sales Management

One of the lessons Susan learned from her experience with the major retail clothing chain was that a properly implemented sales management system would increase sales significantly. Establishing clearly defined sales goals and tracking actual performance against those goals increases sales results. Of course, you need to hold the sales staff accountable for achieving those goals in order to get these better results.

Susan decided to implement a sales management system in the footwear department first. This department has been performing poorly and needs to improve significantly if it is to survive. The department is made up of three individuals, including two full-timers, Pat and Nick, and one part-timer, Sam. They're all good employees, but the store needs to get more productivity from each of them. They need to sell more.

Susan has asked you to calculate a sales goal for the department for the coming month. Thankfully, she has provided you with a Goal Calculator to help with the task. After digging around the finance department for a while, you have managed to come up with enough information to establish the goal.

Goal Calculator

The weekly goals were established based on last year's actual weekly performance. In this case, the sales performance strengthened as the month progressed.

Goal Calculator

Your next task is to implement a simple Weekly Schedule that doubles as a goal planner. By assigning sales goals to each day and to each individual, you provide solid direction and clearly stated expectations for both the department and the staff.

The Weekly Schedule & Goal Planner has been completed with the appropriate staff schedule. Before heading home late last night, you completed the form up to the end of Tuesday. Your task is to finish the form. Good luck!

Note: The percentages listed in the Sales Goal column for each day represent the portion of total weekly sales that each individual day contributes. You got this information from a quick review of sales data for the past six weeks.

You can see that unless performance dramatically improves, this department will have to go! Might be a good start to reduce the staff in this area, too!

Weekly Schedule & Goal Planner

Store:_____________________
Week Of: ________________________

1. Complete scheduling of hours and record total Scheduled Hours. 2. Record Sales Goal. 3. Divide Sales Goal by Scheduled Hours to arrive at Projected Sales Per Hour. 4. Multiply Projected Sales Per Hour by number of hours each individual works to arrive at daily individual sales goals.

Answer

Weekly Schedule & Goal Planner

Store:_____________________
Week Of: ________________________

1. Complete scheduling of hours and record total Scheduled Hours. 2. Record Sales Goal. 3. Divide Sales Goal by Scheduled Hours to arrive at Projected Sales Per Hour. 4. Multiply Projected Sales Per Hour by number of hours each individual works to arrive at daily individual sales goals.

Now that the sales goals are clearly established and the staff know what's expected, it's time to start tracking their individual sales performance. In addition to monitoring just sales, you want to begin to understand their performance better by tracking additional statistics, like Average Sale and Items Per Sale.

To be a good sport and a good leader, you've decided to help Nick complete his Individual Performance Summary. You've already got Monday and Tuesday completed, so it shouldn't take you much time to finish the rest of the week.

As you're completing the summary, take a look at the statistics. Which ones are you happy with? Which ones need improvement?

Individual Performance Summary

Employee Name: Tom
Week Of: ______________

Over/Short:
Record the difference between your Actual Sales and your Sales Goal.

Cumulative:
Calculate and record the total amount of your Over/Short as the week progresses. For example, if you are Over $100 on Monday and Over $50 on Tuesday, your Cumulative is $150 ($100 + $50).

Shift Worked/Hours:
Record both the shift you worked and the total hours covered by the shift.

Items Per Sale:
Divide the # of Items Sold by the # of Transactions. This number indicates your proficiency at selling multiple items to your customers.

Average Sale:
Divide your Actual Sales by the # of Transactions. This number indicates your proficiency at selling both multiple items and higher priced merchandise to your customers.

Sales Per Hour:
Divide your Actual Sales by the number of hours you worked for the day. At week's end, divide your actual weekly sales by the total number of hours you worked.

Answer

Individual Performance Summary

Employee Name: Tom
Week Of: ______________

Over/Short:
Record the difference between your Actual Sales and your Sales Goal.

Cumulative:
Calculate and record the total amount of your Over/Short as the week progresses. For example, if you are Over $100 on Monday and Over $50 on Tuesday, your Cumulative is $150 ($100 + $50).

Shift Worked/Hours:
Record both the shift you worked and the total hours covered by the shift.

Items Per Sale:
Divide the # of Items Sold by the # of Transactions. This number indicates your proficiency at selling multiple items to your customers.

Average Sale:
Divide your Actual Sales by the # of Transactions. This number indicates your proficiency at selling both multiple items and higher priced merchandise to your customers.

Sales Per Hour:
Divide your Actual Sales by the number of hours you worked for the day. At week's end, divide your actual weekly sales by the total number of hours you worked.

The process of setting goals and tracking individual performance is now in place. The new challenge is to understand and manage the information. Looking at daily performance is often misleading because it doesn't present a long enough time frame. However, by the time you get to the end of the week, you've got better information to work with. You've decided to create a Weekly Analysis to help you capture the bigger picture.

Once again, you started to review the Weekly Analysis, but finally gave up at about 8:00 p.m. and decided to go home to your family for fear they may begin to forget what you look like. This retail thing isn't getting any easier, but you're starting to see a whole lot of wins. The staff is even taking to this sales management system. You've seen them trying harder, moving faster and keeping track of their results. You can see their pride when they surpass their goals. It's working.

Your task is to evaluate the Weekly Analysis that follows. As you do, take note of the Sales Per Hour, Average Sale and Items per Sale statistics for each individual. Compare each person's stats to the Store's numbers to see how they are doing and determine what is required to improve their performance. With this information, you can certainly begin to coach them much more effectively.

Weekly Performance Summary

Store: _____________________
Week Of: ______________________

Answers

PAT

Performance Evaluation

• Sales per hour is below store average
• Both items per sale and average sale are also below store average
• As a result, Pat missed her sales goal

Feedback

• Coach Pat on her ability and effort to sell multiple items. This will result in an increased average sale and total sales.

Nick

Performance Evaluation

• All statistics are at or above the store average
• Good performance

Feedback

• Praise Nick for surpassing his sales goal

Sam

Performance Evaluation

• Good week - beat sales goal
• Good IPS, but a low average sale, indicating Sam is not selling more expensive items.

Feedback

• Lots of praise and thanks for a solid week of performance.
• Need to sell more expensive items - focus on Product Knowledge training as a possibility.

You've managed to do it ... you survived to the end of yet another month. The results have been amazing. The staff in the footwear department are focused and motivated. They like the fact that they know what's expected and they are getting recognition for doing a good job. The department's got a long way to go, but it's starting to show signs of life.

Time for the next project. Or at least that's what Susan says! Doesn't she ever rest?