How To Set Effective Sales and Performance Goals
One of the most important tasks of retail management is setting effective goals for employees. Sales and performance goals are an essential part of store budgeting but they must be specific, reasonable, and measurable.
Specific Goals Are Understandable
Whether the Key Performance Indicators (KPIs) are stated in average dollars per transaction or some other unit, the way goals are defined needs to be specific. Employees and store managers must clearly understand what is expected of their performance because comprehension of the KPI comes before intentional action.
Targets such as Average Dollars per Transaction (ADT), Average Units per Transaction (UPT), Average Dollars per Hour (ADH), Wage Cost Percentage and Weekly Workforce Hours should be explained in context of the specific business along with training sessions equipping staff to reach their goals.
Reasonable Goals Are Motivational
Motivation is actually visualization of success. When we are challenged to do something that we can visualize accomplishing, we are motivated to try harder to reach that goal. But those who are expected to do what they cannot imagine doing are defeated before they start.
Sales of an exciting new product, for example, would logically be different than the steady demand for a basic staple. Different scenarios should be able to be annotated so significant factors are taken into account. Staff that has met an emergency challenge successfully are to be valued. Expecting that same staff to perform at the “emergency” level going forward will result in discouragement as they burn out.
Measurable Goals Are Rewarding
ChainDrive’s Store Budgeting software enables you to set goals that are specific and reasonable because they are created with your specific historical and real-time data. The tools enable clear communication of your objectives throughout the operational hierarchy.
In addition to setting targets, the ability to measure what has been done means that individuals, teams, stores, etc. can be recognized for their specific accomplishments and rewarded appropriately.