What is ADS you ask? ADS is the Average Daily Sale (ADS) and retail Expert Doug Fleener considers this to be his favorite metric for any retail store. An interesting article by him describes what ADS is and why it is effective.
ADS is determined by dividing total sales by the number of transactions. For example, a store that had a $20,000 week with 200 transactions has an ADS of $100. Every owner and manager should know his/her running ADS, and set a daily ADS goal for the staff.
1. It’s easier to sell more to a customer who already has her/his wallet open than sell to another customer. This is a HUGE opportunity for most stores. Think about this. If the store above had just sold $10 more to each customer, they would have sold $2,000 more for the week, or an additional $100,000 for the year. That’s 10% growth just by increasing the average sale $10.
2. Having an ADS target for the day changes people’s immediate behaviors. Here’s what I especially like about having a staff focused on an ADS goal. They know if a sale they’re making exceeds or fall short of their target, and when it’s short they’re much more likely to show other items to get above the target. Every specialty store should have a daily ADS goal.
3. It’s easier and more effective to teach and coach people specifically how to increase their ADS rather than the more general “how to achieve your sales goal.” If you invest ten minutes at the start of the day working with an associate on increasing her ADS, she can immediately apply what she learned. When we often talk with an associate about increasing sales, it’s frequently too much theory and too little immediate action.
4. When you track individual ADS you can work with associates who are below the target. If you’re not already tracking individual sales, I recommend you start. But even if you’d rather not, you can still determine individual ADS by having each person initial his/her sales, and then calculate each person’s ADS at the end of the day. You’ll quickly identify who needs more coaching from you in order to increase their ADS. That’s one of the fastest ways to grow your sales with zero investment.
Into action: Determine your store’s ADS (if you don’t already know it). Communicate an ADS goal each day, and let your team know how they do. From there, start teaching and coaching your team on how to grow his/her ADS.
Reprinted with permission from Doug Fleener of Dynamic Experiences Group. A Retail customer experience consulting firms that helps companies improve their customer experience and their sales results.